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DocuSign Shares Gain 17% on Q1 Earnings and Positive FY Outlook

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DocuSign Inc. shares traded higher after the company reported Q1/22 financial results that included a 58% YoY increase in total revenue.

Cloud document management software company DocuSign Inc. (DOCU:NASDAQ), which claims to provide "the world's #1 eSignature solution as part of the DocuSign Agreement Cloud," yesterday announced financial results for Q1/22 ended April 30, 2021.

DocuSign's CEO Dan Springer commented, "We've increasingly become the way people agree in this emerging anywhere economy—and that’s not only helping organizations continue operations during the pandemic, but helping them realize new and more efficient ways of doing business in the future…This fact is reflected by our new and existing customers adopting and expanding at record rates, our 58% year-over-year Q1 revenue growth, and the recent addition of our millionth customer to the DocuSign platform."

The company reported that in Q1/22, total revenue increased by 58% to $469.1 million, compared to $297.0 million in Q1/21. The firm added that in the latest quarter subscription revenue increased 61% year-over-year to $451.9 million and professional services and other revenue rose 7% y-o-y to $17.1 million.

The firm indicated that in Q1/22 GAAP gross margin was 78%, versus 75% in the corresponding period last year.

DocuSign advised that in Q1/22, it posted a GAAP net loss per basic and diluted share of $0.04 based upon on 194 million outstanding shares, compared to a GAAP net loss per basic and diluted share of $0.26 based upon 183 million shares outstanding in Q1/21. The firm noted that on a Non-GAAP basis, it posted net income per diluted share of $0.44 based upon 208 million shares outstanding in Q1/22, compared to net income of $0.12 based upon 197 million shares outstanding in Q1/21.

The firm touched on a few of its recent business operating highlights and noted that several exciting new product capabilities were added to DocuSign Agreement Cloud 2020 Product Release 1 that will assist its customers with driving their digital transformations. Specifically, for the DocuSign eSignature product, improved data verification, eWitness enhancements, and eSignature for Microsoft Teams were added. For the company's DocuSign CLM, new features were integrated for managing supplier relationships in regards to pertinent agreements and amendments.

The company stated that "it introduced DocuSign Notary, its remote online notarization (RON) solution designed to enable organizations to notarize agreements virtually." The firm explained that "DocuSign Notary uses secure identity-proofing technologies to reduce the risk of fraud and provides a detailed audit trail, including a tamper-evident Certificate of Completion and recorded sessions."

The company provide some forward guidance and stated that for Q2/22 in expects total revenue of $479-485 million. The firm anticipates that in Q2/22, non-GAAP gross margin will range from 79-81% and non-GAAP operating margin will be between 16% and 18%.

For FY/22 DocuSign advised that it expects total revenue of $2.027-2.039 billion. The firm estimates that in FY/22, non-GAAP gross margin will continue to range from 79-81% and non-GAAP operating margin remain between 16% and 18%.

DocuSign is headquartered in San Francisco, Calif. The company's DocuSign Agreement Cloud platform allows companies, organizations and individuals with the tools to connect and automate the preparation, processing, execution and management of documents and agreements. The firm stated it has approximately 980,000 customers linked with hundreds of millions of users in more than 180 countries, and that through its DocuSign Agreement Cloud, "it offers eSignature, the world's #1 way to sign electronically on practically any device, from almost anywhere, at any time."

DocuSign began the day with a market cap of around $37.9 billion with approximately 194.6 million shares outstanding and a short interest of about 3.2%. DOCU shares opened nearly 8% higher today at $209.935 (+$15.185, +7.80%) over yesterday's $194.75 closing price. The stock has traded today between $209.935 and $230.23 per share and is currently trading at $228.32 (+$33.57, +17.24%).


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