| --- | --- | --- | --- | |---------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Bringing Agreements | | | | | to Life | | | | | | | | | | Q2 FY25 | | | | | | | | | | | | | | | | | | | Safe Harbor This presentation contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information c ...

Group 1: Earnings Performance - DocuSign reported quarterly earnings of $0.97 per share, exceeding the Zacks Consensus Estimate of $0.80 per share, and up from $0.72 per share a year ago, representing an earnings surprise of 21.25% [1] - The company has surpassed consensus EPS estimates for four consecutive quarters [2] - DocuSign's revenues for the quarter ended July 2024 were $736.03 million, surpassing the Zacks Consensus Estimate by 1.36%, and up from $687.69 million year-over-year [2] Group 2: Stock Performance and Outlook - DocuSign shares have declined approximately 3.4% since the beginning of the year, while the S&P 500 has gained 15.7% [3] - The future performance of DocuSign's stock will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.80 on revenues of $738.47 million, and for the current fiscal year, it is $3.23 on revenues of $2.93 billion [7] Group 3: Industry Context - The Technology Services industry, to which DocuSign belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of DocuSign's stock may also be influenced by the overall industry outlook [8]

Financial Performance - Total revenue for Q2 FY2025 was $736.0 million, a 7% increase year-over-year[1] - Subscription revenue reached $717.4 million, also a 7% increase year-over-year[1] - Billings amounted to $724.5 million, reflecting a 2% year-over-year increase[1] - GAAP net income per diluted share was $4.26, compared to $0.04 in the same period last year[1] - Non-GAAP net income per diluted share was $0.97, up from $0.72 year-over-year[1] - Free cash flow for the quarter was $197.9 million, compared to $183.6 million in the same period last year[1] - Total revenue for the three months ended July 31, 2024, was $736,027,000, representing a 7% increase from $687,687,000 in the same period of 2023[18] - Subscription revenue increased to $717,366,000 for the three months ended July 31, 2024, compared to $669,367,000 in the prior year, marking an increase of 7%[18] - Net income for the three months ended July 31, 2024, was $888,211,000, significantly higher than $7,395,000 in the same period of 2023[18] - Basic net income per share attributable to common stockholders was $4.34 for the three months ended July 31, 2024, compared to $0.04 in the same period of 2023[18] - The company reported a total revenue of $1,445,667,000 for the six months ended July 31, 2024, compared to $1,349,075,000 for the same period in 2023, marking an increase of approximately 7.1%[31] Guidance and Projections - The company expects total revenue for Q3 FY2025 to be between $743 million and $747 million[3] - Non-GAAP gross margin guidance for Q3 FY2025 is projected to be between 81.0% and 82.0%[3] Operational Changes - Docusign launched its Intelligent Agreement Management platform, with applications now available in the U.S. and select international markets[2] - Docusign appointed Paula Hansen as President and Chief Revenue Officer and Sagnik Nandy as Chief Technology Officer[2] Assets and Liabilities - Total assets increased to $3,753,941,000 as of July 31, 2024, from $2,971,290,000 as of January 31, 2024, representing a growth of 26%[20] - Cash and cash equivalents decreased to $619,064,000 as of July 31, 2024, down from $797,060,000 as of January 31, 2024[20] - Total liabilities decreased to $1,792,535,000 as of July 31, 2024, from $1,841,551,000 as of January 31, 2024[20] - Stockholders' equity increased to $1,961,406,000 as of July 31, 2024, compared to $1,129,739,000 as of January 31, 2024, reflecting a growth of 74%[20] Cash Flow and Expenses - Net cash provided by operating activities for the six months ended July 31, 2024, was $475,034, compared to $444,651 for the same period in 2023, reflecting an increase of about 6.8%[22] - Total cash, cash equivalents, and restricted cash at the end of the period was $628,027, down from $1,022,980 at the end of the same period in 2023[22] - Stock-based compensation expense for the three months ended July 31, 2024, was $164,656, compared to $151,707 in the same period of 2023, marking an increase of about 8.5%[22] - The company reported a net cash used in investing activities of $176,110 for the three months ended July 31, 2024, compared to $64,723 for the same period in 2023[22] - Total cash used in financing activities for the six months ended July 31, 2024, was $(408,942), compared to $(90,251) for the same period in 2023[29] Profitability Metrics - Non-GAAP gross profit for the three months ended July 31, 2024, was $605,036, up from $565,791 in the same period last year, indicating a growth of approximately 6.9%[24] - GAAP gross margin for the three months ended July 31, 2024, was 78.9%, slightly up from 78.8% in the same period of 2023[24] - Non-GAAP subscription gross profit for the three months ended July 31, 2024, was $604,249, compared to $569,248 in the same period last year, showing an increase of approximately 6.1%[24] - GAAP subscription gross profit for the three months ended July 31, 2024, was $584,994, up from $553,182 in the same period last year, indicating a growth of approximately 5.7%[24] - Non-GAAP operating margin for the three months ended July 31, 2024, was 32.2%, compared to 24.7% for the same period in 2023[27] - GAAP income from operations for the three months ended July 31, 2024, was $57,801, significantly higher than $6,612 for the same period in 2023[27] Contractual Obligations - Contract liabilities and refund liability at the end of the period were $1,334,461,000, up from $1,233,894,000 at the end of the previous year, indicating a growth of approximately 8.2%[31] - Contract assets and unbilled accounts receivable at the beginning of the period were $17,179,000, down from $22,936,000, showing a decrease of about 25.3%[31] - The beginning balance of contract liabilities and refund liability was $1,340,680,000, compared to $1,210,965,000 in the previous year, reflecting an increase of approximately 10.7%[31] - The company experienced a decrease in contract assets and unbilled accounts receivable at the end of the period to $17,461,000 from $22,358,000, a decline of about 21.5%[31] - Total non-GAAP billings for the six months ended July 31, 2024, were $1,434,046,000, compared to $1,385,957,000 for the same period in 2023, indicating an increase of approximately 3.5%[31]

Core Viewpoint - Docusign reported improved business stability and efficiency, achieving record operating profit and launching its Intelligent Agreement Management platform, which received positive early feedback from customers [2]. Financial Highlights - Total revenue for the second quarter was $736.0 million, a 7% increase year-over-year [2]. - Subscription revenue reached $717.4 million, also up 7% year-over-year [2]. - Professional services and other revenue amounted to $18.7 million, a 2% increase year-over-year [2]. - Billings were $724.5 million, reflecting a 2% year-over-year increase [2]. - GAAP gross margin was 78.9%, slightly up from 78.8% in the same period last year [2]. - Non-GAAP gross margin was 82.2%, down from 82.3% year-over-year [2]. - GAAP net income per basic share was $4.34, compared to $0.04 in the same period last year [2]. - Non-GAAP net income per diluted share was $0.97, up from $0.72 year-over-year [2]. - Free cash flow was $197.9 million, compared to $183.6 million in the same period last year [2]. Operational Highlights - Docusign announced the general availability of its Intelligent Agreement Management (IAM) platform, which aims to streamline and automate agreement processes [3]. - IAM applications include IAM Core, IAM for Sales, and IAM for Customer Experience, with a rollout planned for various customer segments throughout the fiscal year [4]. Executive Changes - Paula Hansen was appointed as President and Chief Revenue Officer, previously serving at Alteryx [4]. - Sagnik Nandy joined as Chief Technology Officer, coming from Okta [4]. Guidance - For the quarter ending October 31, 2024, Docusign expects total revenue between $743 million and $747 million [5]. - Subscription revenue guidance is set between $722 million and $726 million [6]. - Billings are projected to be between $710 million and $720 million [6]. - Non-GAAP gross margin is expected to be between 81.0% and 82.0% [6]. - For the fiscal year ending January 31, 2025, total revenue is anticipated to be between $2.94 billion and $2.95 billion [7].

Core Viewpoint - DocuSign, Inc. is set to report its second-quarter fiscal 2025 results on September 5, with earnings expected to grow by 11.1% year-over-year and revenues projected to increase by 5.6% [1][12]. Financial Performance - The Zacks Consensus Estimate for earnings is 80 cents, with revenues estimated at $726.2 million [1]. - Subscription revenues are expected to reach $706.8 million, indicating a 5.7% year-over-year growth, while professional services and other revenues are pegged at $19.4 million, reflecting a 5.6% increase [6]. - In the first quarter of fiscal 2025, DocuSign reported a 14% year-over-year increase in non-GAAP earnings per share to 82 cents and a 7% rise in total revenues to $710 million [10]. Market Position and Strategy - The company has a strong earnings surprise history, surpassing estimates in the trailing four quarters with an average surprise of 15.7% [2]. - Customer acquisition is expected to be a key driver for revenue growth, with initiatives aimed at increasing sales from both existing and new customers [5]. - Recent product innovations, such as AI-enabled identity verification, and partnerships with Salesforce and Microsoft have strengthened DocuSign's market position [11]. Valuation Metrics - DocuSign's stock has gained 10.5% over the past three months, outperforming the industry and the S&P 500 [7]. - The stock is trading at an EV-to-EBITDA ratio of 26.6X, significantly lower than the industry average of 50.6X, and a forward Price/Earnings ratio of 17.6X, above the industry's 35X [8][14]. Long-term Growth Potential - The growing demand for eSignature services presents significant opportunities for global expansion, despite the market being largely untapped [9]. - The company's strategic goals include accelerating product innovation and improving operational efficiency, which are expected to support long-term growth [10][14].

Core Insights - Wall Street analysts expect DocuSign (DOCU) to report quarterly earnings of $0.80 per share, reflecting an 11.1% year-over-year increase [1] - Projected revenues for the quarter are $726.15 million, which represents a 5.6% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [1] Revenue Estimates - Analysts estimate 'Revenue- Professional services and other' to be $19.41 million, indicating a 5.9% increase from the prior-year quarter [4] - The 'Revenue- Subscription' is projected to reach $706.75 million, reflecting a 5.6% increase from the year-ago quarter [4] Non-GAAP Metrics - Estimated 'Non-GAAP billings' are projected at $720.57 million, compared to $711.19 million reported in the same quarter of the previous year [5] - Analysts expect 'Non-GAAP subscription gross profit' to be $591.58 million, up from $569.25 million in the previous year [5] Stock Performance - DocuSign shares have increased by 10.1% over the past month, outperforming the Zacks S&P 500 composite, which rose by 2.5% [5] - With a Zacks Rank 3 (Hold), DOCU is anticipated to closely follow overall market performance in the near term [5]

Core Viewpoint - DocuSign has been trending in stock searches, with a recent performance of +5.6% over the past month, outperforming the S&P 500 composite's +2.2% and the Zacks Technology Services industry's -0.6% [1][2] Earnings Estimate Revisions - For the current quarter, DocuSign is expected to report earnings of $0.80 per share, reflecting an increase of +11.1% year-over-year, with the consensus estimate remaining unchanged over the last 30 days [5] - The consensus earnings estimate for the current fiscal year is $3.26, indicating a year-over-year change of +9.4%, also unchanged over the last 30 days [5] - For the next fiscal year, the consensus estimate is $3.52, representing a +7.9% change from the previous year, with no changes in the estimate over the past month [6] Revenue Growth - The consensus sales estimate for the current quarter is $726.15 million, indicating a year-over-year change of +5.6% [9] - For the current fiscal year, the revenue estimate is $2.93 billion, reflecting a +6% change, while the next fiscal year's estimate is $3.11 billion, indicating a +6.2% change [9] Last Reported Results - In the last reported quarter, DocuSign achieved revenues of $709.64 million, a year-over-year increase of +7.3%, with an EPS of $0.82 compared to $0.72 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $706.07 million by +0.51%, and the EPS surprise was +3.8% [11] - The company has consistently beaten consensus EPS and revenue estimates in the trailing four quarters [11] Valuation - DocuSign is graded C in the Zacks Value Style Score, indicating it is trading at par with its peers [15] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is fairly valued [13][14] Conclusion - The Zacks Rank 2 suggests that DocuSign may outperform the broader market in the near term, supported by the discussed earnings and revenue estimates [16]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Docusign. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Group 1 - DocuSign will release its second quarter fiscal 2025 results on September 5, 2024, after market close [1] - A conference call to discuss the financial results will be held at 2:00 p.m. Pacific Standard Time [1] - A live webcast of the event will be available on the DocuSign Investor Relations website [1] Group 2 - DocuSign serves over 1.5 million customers and more than a billion users across 180 countries [2] - The company offers solutions that accelerate business processes and simplify lives through its e-signature and Contract Lifecycle Management services [2] - DocuSign IAM platform enables businesses to manage agreements and unlock critical data trapped in documents [2]

DocuSign Inc (NASDAQ:DOCU) is 1.5% higher at $56.41 this afternoon, extending a bounce off support at the $49 region. The equity is about to hit familiar pressure at the $57 region, however, and could add to its 5.2% year-to-date deficit, as the recent uptick has it flashing a historically bearish signal. More specifically, DocuSign stock just came within one standard deviation of its 100-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals occ ...