Ticker Take: DOCU Q1 FY20

Hi Fools:

Yesterday after the bell, Docusign released its Q1 FY20 results. By all measure the company had very solid quarter and continues to execute well against its business strategy. Here are some top-line results for the quarter: $214 million in revenue, an increase of 37 percent over the prior year. That is well ahead of the company’s own guidance and analyst expectations of $208.15 million in revenue. Net income of $13.5 million for the quarter, or $0.07 per share, came in ahead of analyst expectations of $0.04 per share. And finally, DocuSign finished the quarter with 508,000 paying customers, up roughly 27 percent over a year ago, when the company reported 400,000 customers. The company raised its full year estimates.

Any reasonable observer would think that with results like these investors would reward the stock with a tick up…but this is not what happened. Share price is down 18% in the aftermarket. Go figure.

As you will see later on in this report, during the conference call analysts seemed to struggle with and express some concerns about Docusign’s elongated sales cycle in the quarter. As most observers of the company know, Docusign recently introduced its new Systems of Agreement (SOA) Platform, also known as “Docusign Agreement Cloud,” in Q1 FY20. Because this platform is more complex, providing multiple solutions with in the agreement process, than the e-signature products the company markets, it naturally takes more time to both sell the platform of services and help enterprises integrate it into their business. This caused some sales to slip into the next quarter. It is worth noting that while this seems to be a concern of the analysts, this transition to Agreement Cloud sales is exactly what long term investors want to see, mainly because sales of this platform will have a much greater contract value than the e-signature products alone. It should also, over time, provide more opportunity to expand “landed” customer usage of Docusign products. If successful, this will show up as increased net expansion rates in future quarters. In my view, DOCU is on track in efforts to pivot to Agreement Cloud sales, it is causing a slight change in the company’s historic sales cycle, which in turn had a small impact on billings in the quarter and possibly on the net retention rate, and that is what is making some analysts and investors nervous.

Below are the key metrics I follow for DOCU. As I mentioned in my report last quarter, while the company continues to perform quite well in all areas, there are two metrics I want to keep an especially close eye on: Dollar Based Net Retention, which was reported at 112% for Q1, as it was in Q4 FY19. This is at the bottom end of DOCU’s goal of 112%-119% on a quarterly basis. Anything lower than 112% might suggest that the DocuSign’s land and expand strategy is not as robust as I would like. Additionally, over time I want to see year over year revenue growth re-accelerate as the company implements is strategy to implement its System of Agreement platform. You’ll not that that y/y revenues for this quarter grew 37%, as opposed to 34% for the same quarter, FY19. This is good news.

Here are the numbers:

Total Customers:

FY19       Q1           Q2       Q3       Q4
           400k         429k     454k     477k
FY20       508k

Customers with annual contract value (ACV) >$300K:

FY19       Q1          Q2        Q3       Q4
           215         246       285      310
FY20       324

*51% year-over-year

Dollar Based Net Retention

FY19:      Q1          Q2        Q3       Q4
           114%        115%      114%     112%
FY20:      112%

Revenue (rounded):

 	Q1	Q2	Q3	Q4	Sum
FY16	 	 	 	 	250
FY17	84	92	97	108	381
FY18	113	125	131	149	518
FY19	156	167	178	200     701
FY20    214

Revenue Growth (Y/Y):
 	 	 	 
2017	52%
2018    36%
2019	34%
2020    37%

Billings:

        Q1	Q2	Q3	Q4
 
FY19	169	172     198	262
FY20    215

Gross Margin (Non-GAAP):

FY19    Q1     Q2      Q3       Q4
        80%    81%     79%      80%
FY20    79%

Earning per Diluted Shares (non-GAAP):

FY19    Q1     Q2       Q3     Q4
        $.01   $.03     $.00   $.06
FY20    $.07

Free Cash Flow (mil):

FY19    Q1      Q2       Q3    Q4
        8.8     18    (-4.3)   23
FY20    30.4

Net Cash from Ops (mil):

FY19    Q1      Q2       Q3    Q4
        15      23       4     34
FY20    45.7

Cash & Equivalents (mil):

FY19    Q1      Q2        Q3    Q4
        270     819       1B  934M 
FY20    937

 

Highlights from the Conference Call: https://www.fool.com/earnings/call-transcripts/2019/06/06/do…

On the Docusign Agreement Cloud

CEO SPringer: Now, let’s talk about the DocuSign agreement cloud, and our ability to automate and connect the entire agreement profit. In March this year, we just announced the DocuSign Agreement Cloud. Our expanding suite of more than the dozen products and over 350 integrations for digitally transforming, how organizations prepare, sign, act on and manage their agreements. The DocuSign Agreement Cloud includes our flagship e-signature product and several other DocuSign product offerings, as well as the recently acquired SpringCM offering for contract life cycle management and the hundreds of integrations to other applications involved in the agreement products, such as those from Salesforce, Microsoft, Google, Oracle and SAP. It also includes three new products that were announced after our last earnings call. So I’d like to take a moment to highlight them today.

The first is DocuSign Gen, designed for small to medium businesses, primarily in the Salesforce ecosystem. Gen enable sales rep and other users to automatically generates signature ready contracts, with just a few click. And do it directly from within Salesforce. This can result in faster deals, fewer errors and greater productivity. The second new product is DocuSign Click. It allows organizations of any size to capture consent to standard agreement terms on websites such as the privacy policy with just a single click. These so-called no signature required agreements, our new opportunity for DocuSign to replace in-house or custom solutions, which are costly to maintain and often lack DocuSign extensive auditability.

The third new product is DocuSign Identify. It allow the company to automate the verification of government issued IDs and European eID, for transactions that require them. For example, opening a bank account would normally required the sign or to physically present a photo ID. DocuSign ID verification allows this process to be digitize and automated, enabling signers to verify their identity on a mobile device from practically anyway.

So, when you put all this together, we believe that the DocuSign agreement cloud defined entirely new category of cloud software, one the complement the marketing sales, HR, ERP and other cloud categories that already exists, connecting them all into agreement process. To give you a customer example, one of the world’s largest companies is using several products in the DocuSign agreement cloud together, by using DocuSign signature, SpringCM, DocuSign for sales force and our integration with SAP. This system is now live in 43 countries and over $70 billion worth of agreements flow through an annually. It’s allowed the customer to cut the time it takes to get an agreement completed by about 80%, saving hundreds of millions of dollars as a result. We are seeing more and more examples like this all the time. And with the DocuSign Agreement Cloud, we are excited to have the product suite that can fulfill them.

On roll out of the Agreement Cloud

CFO Sheridan: First quarter billings increased 27% year-over-year to $215 million included in this growth with a strong starting customers’ purchasing multi-product solutions of e-signature together with document generation and CLM products. Multi-product sales involved more complexity in terms of integration designs and related SOW. This very positive motion in our business also elongated some of our upsell cycles this quarter, for existing customers wanting to deploy our expanded offerings. This extended sales cycle impacted our billings in dollar net retention in Q1.

…,And a sampling of analyst angst regarding impact of roll out on billings, NRR:

Sterling Auty – JPMorgan – Analyst

Yeah, thanks. Hi guys. I wanted to dive into the comment about elongated sales cycles on the upsell opportunity. Can you give us a little bit more color. What is it specifically that’s causing as a decision process on the customer. What can you do to possibly shorten it again, and how is that actually also impacting subscription revenue (ph).

Daniel Springer – Chief Executive Officer

Sure. Sterling, I think, what happens is, if we are a single product company and we’re moving to a broader platform in a multi-product company, and so when we have the opportunity, which we’re excited about to sell people a broader suite. There are more people that are involved and give you specific example, so the large bank customer in Europe. And normally we would have had a more straightforward e-signature only. They were interested in also looking at some of the CLM capabilities Spring, and if we got to the – for the end of the quarter, we realized our normal sort of pasting and process would take longer and for deals it closed 10 days after the end of the quarter. But going into the quarter, we would have expected in a traditional e-signature sales cycle, a single product fewer signatures required et cetera. That will be better. So that’s kind of what we tend to see.

In terms of your question of making that go faster, I mean, I actually want to have more and more of our deals have the multi-product capability. I do think there’s an opportunity for us to continually improve on the enablement we do of our sales force. And remember, this is still new for a lot of folks, move from a single product to the multi-product model, but enable them to, one, be able to forecast better. But also to be able to accelerate that process. And from a standpoint in terms of the revenue growth, like you want to chat a little bit about that.

Michael Sheridan – Chief Financial Officer

Yeah, Sterling, in terms of subscription revenue, these product sets are pretty much all subscription products. So the timing of the – of the ultimate booking or billing will impact the starting point of the revenue, but in terms of mix and everything else that you have modeled it doesn’t really have any impact.

Sterling Auty – JPMorgan – Analyst

Okay, great. And then one follow-up question. The services revenue. I know it’s small in terms of overall. But second straight quarter that it’s up nicely relative to expectations. What’s driving the upside and services?

Daniel Springer – Chief Executive Officer

One of the pieces there, if you think about the new products that we’re selling, they generally require statement of work for implementation, because again the CLM capability. That software is fantastic, but it’s not honed and it’s easy to use and implement as a DocuSign e-signature capability which requires a lot less. So we do expect there will be some increases in demand there. I would like to point out that we are very committed to our partner strategy and one of our aspiration is to take a lot of that, that demand for services and to leverage the partner network. So I wouldn’t want to set the expectation that you should see some sort of exponential growth in our services revenue. We would still like to leverage the partner channel.

On international growth

CEO Springer: We continue to see growth in our international markets. In markets like the UK, France, Germany, Brazil, Australia and Japan, we are just beginning to tap the potential. And no matter where our customers are based, we believe there is significant opportunity to expand the use of e-signature into other department. As has long been in the case once companies experienced the speed, time and simplicity benefit of DocuSign e-signature, they are keen to replicate those results elsewhere in the enterprise.

And…more analyst angst on sales cycle

Karl Keirstead – Deutsche Bank – Analyst

Hi, thank you. Maybe I have got two on the same subject just around the sales cycles. So maybe the first one is for you, Michael. So the, in Q1 the reported billings was a little bit worst sequential growth and we saw in Q1 last year. And I’m sure it’s for the reasons you mentioned. If I take the high end of the July quarter guidance, it’s actually seasonally stronger than 2Q last year. So one might infer that the deals such as the one that Dan mentioned like maybe they spilled into 2Q and you’re banking on them closing. So fundamentally, we are talking about a 1Q to 2Q shift. Is there any credence to that? And then, yeah, maybe I’ll stop there and I’ll ask my follow-up once you’re done. Thanks.

Michael Sheridan – Chief Financial Officer

Yeah, Karl, I think that to the extent that, that we have a longer sales cycle, you would expect that in any quarter, some of those are going to shift out of quarter. I would tell you that it’s not a one quarter phenomenon, I think as we continue to be successful with these multi-product deals that same still cycle. We’ll also be relevant at the end of Q2 or at the end of Q3 over time. I think, to Dan’s point with enablement and other factors, we will continue to get a better and improved motion around these kinds of deals. But I wouldn’t look at it is just a factor at the end of a particular quarter. It will be time as we continue to – transition into these larger deals.

Karl Keirstead – Deutsche Bank – Analyst

Got it. Okay. And then maybe my follow-up is just clarity on what exactly customers are considering that’s causing the delays because, if what you’re referring to is, are the SpringCM deals, you’ve given us enough disclosures that we know that generally represents sub 10% of billings and maybe even sub 5% billing. So at first blush these additional SpringCM products don’t seem to be a large enough portion of the total deal conversation to cause a slip. But maybe there is a flow on that logic, if you could clarify. Thanks.

Michael Sheridan – Chief Financial Officer

Yeah. And I would first tell you that I agree, I don’t think we’ve had a slip. I think this is right in line with how we seen our business and how we are guiding it. But if you look at a couple of things, Karl, if you break this down into new customers and then expansion of existing relationships you can tell from our new customer growth that continues – that’s going to largely be e-signature business on these upsells what we’re seeing is customers that already have e-signature are looking to us to expand that e-signature relationship as they have in the past. But now they’re coming back to us at the level that we are actually very encouraged about is sort of the first full quarter of being integrated.

Coming back to saying, we’re really interested in your document generation technology, we’re really interested in your CLM technology. So these aren’t just pure deals of a new product, it’s the combination of the two, that if – I think Dan mentioned, if it – it remained just an e-signature, expansion deal well those pretty much closer to regular cadence when it expands into, yes, we want to do that, but we also want to consider now deploying these other products into our solution set, that combination is what’s causing us to, to take a little more time to bring into the closure Dan mentioned statements of work for example that would in a combined deal. Deal step in the process that’s a little bit different than if it was just a pure single product e-signature kind of transaction.

Daniel Springer – Chief Executive Officer

And another thing I would add to that filing is not exclusively SpringCM. If we talk about the overall DocuSign Agreement Cloud, there partner sale opportunities like Seal Software, or we just made investment in them. As you recall, Intelledox, some of other partners stories. So there is a broader set and then just the Spring component.

On Dollar-based Net Retention Rate

Justin Furby – William Blair – Analyst

Great, that’s helpful. And then Mike, just for you. The retention if you look at it on a gross basis in terms of gross churn across your business and a consistent. Any changes there. Thanks.

Michael Sheridan – Chief Financial Officer

Yeah, I think the only thing I would point to on the dollar net retention is obviously we’re talking about some of the upsell transactions, which affect that statistic. Otherwise, I wouldn’t see anything underlying statistics within the business that was out of the norm.

Stan Zlotsky – Morgan Stanley – Analyst

Perfect. Thank you so much for taking my question. And maybe just follow up on now on Justin’s question a second ago. As these larger, larger deals with SpringCM included start to close. Could we start to see net revenue retention start to trend up more toward the historical ranges that you’ve seen more in the 114% to 115% range as we go through the year.

Michael Sheridan – Chief Financial Officer

Yeah. So I see and I would tell you that – I would reiterate the 112% to 119% we’ve always talked about, but yes I think that there’s an opportunity for us to have that move into the more historical kind of mid-teens kind of range.

Fools, there is much more to read in the transcript (linked above), especially if you didn’t get your fill of analyst angst regarding the necessary changes to the sales cycle based on the deeper complexity of selling the Agreement Cloud Platform.

Q1 Highlights from the Press Release https://investor.docusign.com/investors/press-releases/press…

Fourth Quarter Financial Highlights

Total revenue was $199.7 million, an increase of 34% year-over-year. Subscription revenue was $187.6 million, an increase of 37% year-over-year. Professional services and other revenue was $12.2 million, an increase of 5% year-over-year.
Billings were $262.4 million, an increase of 31% year-over-year.
GAAP gross margin was 74%, compared to 79% in the same period last year. Non-GAAP gross margin was 78% compared to 80% in the same period last year.
GAAP net loss per basic and diluted share was $0.40 on 167 million shares outstanding compared to GAAP net loss per share of $0.20 in the fourth quarter of fiscal 2018 on 34 million shares outstanding.
Non-GAAP net income per diluted share was $0.06 based on 188 million shares outstanding compared to non-GAAP net income per share of $0.01 in the fourth quarter of fiscal 2018 based on 42 million shares outstanding.
Net cash provided by operating activities was $34.1 million, compared to $32.0 million in the same period last year.
Free cash flow was $22.8 million compared to free cash flow of $28.7 million in the same period last year.
Cash, cash equivalents, restricted cash and investments were $933.6 million at the end of the quarter.

Fiscal 2019 Financial Highlights

Total revenue was $701.0 million, an increase of 35% year-over-year. Subscription revenue was $663.7 million, an increase of 37% year-over-year. Professional services and other revenue was $37.3 million, an increase of 10% year-over-year.
Billings were $801.4 million, an increase of 34% year-over-year.
GAAP gross margin was 73%, compared to 77% in fiscal 2018. Non-GAAP gross margin was 80% compared to 79% in fiscal 2018.
GAAP net loss per basic and diluted share was $3.16 on 135 million shares outstanding compared to GAAP net loss per share of $1.66 in fiscal 2018 on 32 million shares outstanding.
Non-GAAP net income per diluted share was $0.09 based on 159 million shares outstanding compared to non-GAAP net loss per share of $0.43 in fiscal 2018 based on 32 million shares outstanding.

My take: This was a solid start to FY20 for Docusign. All indications suggest that this company is executing well against it business strategy and that the roll out of the Agreement Cloud and its pivot to a more complex set of products organized around a system of agreements is proceeded well and as planned. Mr. Market apparently dislikes change and has shown its displeasure in the AH market. If you are looking to start a position in DOCU, today might offer up an opportunity to do so. Shares are selling at an EV/S of 8.6X for a company growing well over 30% year over year. As a CMF, I can not give you advice on what you should do as an investor, each individual has to decide themselves if this offering is attractive to you.

For those of you who may be new to this company, here is a deep dive I wrote that provides detailed background:

https://discussion.fool.com/docu-deep-dive-34121285.aspx

Best, Swift…
Long DOCU

46 Likes

I was hoping my pre-market orders (in the $40-44 range) would hit so I could add, but they were a bit too low. Anyway, I don’t think this earnings provides anywhere near the justification for a 20% to 15% hit to this stock, and expect it will even back out in a day or five. Analysts are a weird bunch, for sure.

I decided to sell my DOCU shares this morning.

At first glance, I thought the report was good and couldn’t understand the drop.

As I dug into the details, I’m concerned the billings deceleration forecasts slowing revenue growth on the horizon. It at least increased the probability of slowing growth in the future.

  • Subscription revenue grew an average of 37% over the 4 Q’s last year, billings grew 34%.
  • last quarter, subscription rev. grew 37%, billings grew 31%
  • this quarter, subscription rev. grew 36%, billings grew 27%
  • the “longer sales lead time” explanation is BS, billings have been slowing for awhile
  • next quarter guidance is for Rev. of 218-222, and billings of 215-225.
  • have you even seen a billings guide equal to revenue? forecasting continued slowing of billings
  • the only way rev. growth can continue with billings slowing, is if the contract period is shrinking.
  • shrinking contract length, means companies are less committed to DOCU, and can change quicker to a competitor

-net retention rate of 112%, same as last quarter and at the low end of the range
-no increase in net retention rate means the current customers aren’t adding on the system of agreement yet

Bottom line: I see increased risk of slowing revenue growth, signs that customers aren’t committing to DOCU long term,and no sign yet that the “system of agreement” is working.

I’m going to keep an eye on DOCU, and will be interested again if I see proof in billings improvement (customers showing commitment to lock in long term) and that the new system of agreement is being purchased by customers.

Jim

24 Likes

I decided to sell my DOCU shares this morning. At first glance, I thought the report was good and couldn’t understand the drop. As I dug into the details,…

Hi Jim,
I’ve been out of Docu for a while and haven’t read the earnings report, but I’d like to thank you for what appears to be a very nicely thought out analysis that will be useful to others on the board, and then to congratulate you for taking action on your conclusions.
Best,
Saul

11 Likes

Kudos to analysts for actually doing their job like professionals! They asked the biting questions that needed to be asked based upon the numbers and the context.

When the numbers don’t equate to the narrative then you have trouble. As a new product roll out things can always improve and take off, it just usually takes longer than you think to make this happen.

From an investing perspective, in my mind, unless the issues deals around a FUD event, you are simply speculating whether or not these sales will close consistent with the narrative when there is no real world evidence to say they will.

Sometimes it is a very specific issue worth the risk. E.g, when Mongo announced versos 4.0 of their software with ACID capabilities. That took Mongo above and beyond its competition, resolved the one huge issue between it and SQL, and was something that we thought would be a huge catalyst if successful. And the narrative happened as indicated and worked out better than ever.

At the time Mongo was still growing at nearly 50% per quarter, was already showing sales momentum, IBM coming on as a re-seller, etc., and there were no “elongated” sales cycles or sales moving into the next quarter so of thing.

That was a specific known element, fixing a known problem, that was unique in the world.

With Docusign, this is more just speculation and faith that things catch on. As such I don’t see why when there are so many other things to invest in. The usual retort is it is “cheap”…

Docusign is a good company, and they may turn this around as the sales know how and product mature. If so, they should be an excellent investment from here. For me, specifically however, I need to see the numbers and surrounding facts to be consistent with the narrative. The reasons (may turn out to be legitimate) of longer sales cycle, etc., far more times than not turn into SALES PROBLEMS. I just don’t like investing into a circumstance like this.

Looked at another way, why did management not plan on this longer sales cycle? Perhaps they are learning as we go forward and things will get better.

There is nothing broke about Docusign. I just cannot get onboard when the enterprise products are not equating to the narrative at the moment, and the reason is not specific (like with Mongo - and Mongo was already exceeding the narrative at the time) but is general sales elongation.

Again, this is the case far more often than not. This may not apply to Docusign in the end. But just for ME, Docusign is not putting off the signals I want to see relative to other places to put my money.

Tinker

25 Likes

elongated sales cycles smells like heightened competitive situation to me…

remember, Adobe is the competition here and they are default choice for documents of all kinds…

its quite possible that Adobe was caught sleeping at the wheels on e-signature that allowed DOCU to pick up a huge portion of the market but now Adobe may have caught up…

I dont have position and with this billings slowdown, I am even less inclined to look at DOCU in near term.

For those still in DOCU and looking at this as opportunity, it will be worth paying attention to what ADBE says on this topic in their earnings and public discussions…

3 Likes

Wow, Swift, great report. You deserve credit for your contribution. I appreciate it. I’m sure others do as well. But I have issues with DOCU which remain. I hold a small position, but DOCU is next on the chopping block for me (sold the last of my small ESTC position this morning).

I’ve written before on a different thread that DOCU faces the “if it ain’t broke, don’t fix it” syndrome. Every company (I mean every company) already has an agreement process. You simply cannot conduct business without it. Even if it’s literally a handshake, it’s a process.

With the agreement cloud, DOCU has managed to complicate the process, lengthen the implementation, created more disruption to business processes that are already functioning adequately and driven up the cost of transition. That’s a hard sell.

In the long run, DOCU’s product most likely will improve efficiency and provide a higher level of consistency, integrity and security to the agreement process and the general operations of a company. But companies report quarterly. There is a lot less attention paid to the “long run” than many of us might think appropriate. However, most managers are of a mind that they will be in a different position in the long run, possibly at a different firm. I’ve been a manager at a Fortune 50 company. I’ve seen this mode of thinking first hand. For a fundamental business process that’s already working to become the target of new development it must be driven by law/regulation or truly dramatic financial benefit. IMO, the agreement cloud satisfies neither requirement.

6 Likes

Thanks, Brittlerock.

The discussion on this board regarding DOCU, post Q1 earnings report, has been phenomenal (Huge thanks to all who have contributed, this is what makes Saul’s Board so valuable). I think the bears and the bulls on DOCU each make valid points. Myself, I am willing to have some patience to see how the company does over next few quarters. I am keeping a close eye on the financial metrics I mentioned in the post above and other indicators to ultimately tell me what to do with my investment.

You said: For a fundamental business process that’s already working to become the target of new development it must be driven by law/regulation or truly dramatic financial benefit. IMO, the agreement cloud satisfies neither requirement.

I agree with your premise, Docusign’s CEO disagrees with your conclusion, specifically regarding “truly dramatic financial benefits…”. Here is what he said on the conference call about this very topic (read all the way to the end for the punchline):

CEO Springer: Now, let’s talk about the DocuSign agreement cloud, and our ability to automate and connect the entire agreement [process]. In March this year, we just announced the DocuSign Agreement Cloud. Our expanding suite of more than [a] dozen products and over 350 integrations for digitally transforming, how organizations prepare, sign, act on and manage their agreements. The DocuSign Agreement Cloud includes our flagship e-signature product and several other DocuSign product offerings, as well as the recently acquired SpringCM offering for contract life cycle management and the hundreds of integrations to other applications involved in the agreement products, such as those from Salesforce, Microsoft, Google, Oracle and SAP. It also includes three new products that were announced after our last earnings call. So I’d like to take a moment to highlight them today.

The first is DocuSign Gen, designed for small to medium businesses, primarily in the Salesforce ecosystem. Gen enable sales rep and other users to automatically generates signature ready contracts, with just a few click. And do it directly from within Salesforce. This can result in faster deals, fewer errors and greater productivity. The second new product is DocuSign Click. It allows organizations of any size to capture consent to standard agreement terms on websites such as the privacy policy with just a single click. These so-called no signature required agreements, our new opportunity for DocuSign to replace in-house or custom solutions, which are costly to maintain and often lack DocuSign extensive auditability.

The third new product is DocuSign Identify. It allow the company to automate the verification of government issued IDs and European eID, for transactions that require them. For example, opening a bank account would normally required the sign or to physically present a photo ID. DocuSign ID verification allows this process to be digitize and automated, enabling signers to verify their identity on a mobile device from practically anyway.

So, when you put all this together, we believe that the DocuSign agreement cloud defined entirely new category of cloud software, one the complement the marketing sales, HR, ERP and other cloud categories that already exists, connecting them all into agreement process. To give you a customer example, one of the world’s largest companies is using several products in the DocuSign agreement cloud together, by using DocuSign signature, SpringCM, DocuSign for sales force and our integration with SAP. This system is now live in 43 countries and over $70 billion worth of agreements flow through an annually. It’s allowed the customer to cut the time it takes to get an agreement completed by about 80%, saving hundreds of millions of dollars as a result. We are seeing more and more examples like this all the time. And with the DocuSign Agreement Cloud, we are excited to have the product suite that can fulfill them.

So there you go, that’s DOCU’s story (and they’re sticking to it!). As Tinker and a few others have noted, at this point the Agreement Cloud and the potential of doubling of the company’s TAM (from $25B to $50B) is mainly (but not entirely, see final paragraph of Springer statement above) just that, a story. The question remains, can the company execute against this vision effectively in a timeframe that accelerates their growth? We shall see. At this point in the evolution of Docusign’s product offerings, “where’s the beef?” is certainly a fair question. Especially because there are other companies out there in the “Saul universe” that are completely smashing it in terms of hyper growth and stock appreciation.

A link to Docusign’s website that provides much more info in the Agreement Cloud:

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

Best, Swift…
Long DOCU

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