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Shares of DocuSign Inc. gained about 3% in after-market trading Thursday after the company’s latest results showed a boost from companies that were looking for digital ways to execute agreements as the COVID-19 crisis made in-person meetings more difficult.
DocuSign DOCU, -5.01%, which makes technology that allows companies to obtain electronic signatures on documents, topped earnings and revenue expectations for its fiscal first quarter while giving an upbeat forecast for the current period.
Chief Executive Dan Springer said on the company’s earnings call that DocuSign has picked up new customers during the pandemic and seen greater uptake of its services among existing customers. DocuSign added more than 10,000 net new direct customers in the quarter as well as 58,000 self-service customers.
“Even when the COVID-19 situation is behind us, we don’t anticipate customers returning to paper or manual-based processes,” he told investors on the call.
Springer said on the call that the e-signature feature is often the reason companies come to DocuSign, so the “surge in e-signature adoption bodes well for future ‘agreement cloud’ expansion,” meaning the company’s services that extend beyond signatures.
He told MarketWatch afterward that many customers flocking to the platform during the crisis had urgent and relatively simple use cases, like needing to build an electronic form for patients seeking COVID-19 testing in a parking lot.
These customers “probably weren’t interested” at the time in hearing DocuSign’s pitch on its broader array of offerings, he said, and the company didn’t see a lot of people using the opportunity to rethink their “overall system of agreement,” DocuSign’s term for the life cycle of an arrangement, which spans building contracts, obtaining signatures and managing documents after they’ve been signed. Once the health crisis subsides, Springer sees an opportunity to start having those conversations.
For the fiscal first quarter, DocuSign reported a net loss of $47.8 million, or 26 cents a share, compared with a loss of $45.7 million, or 27 cents a share, in the year-prior period. On an adjusted basis, the company earned 12 cents a share, up from 7 cents a year earlier and ahead of the FactSet consensus, which called for 10 cents a share.
DocuSign saw quarterly revenue rise to $297 million from $214 million, while analysts were expecting $281 million. The company’s sales consisted of $280.9 million in subscription revenue and $16.1 million in professional services and other revenue. DocuSign generated billings of $342.1 million, up from $215 million a year earlier, while the FactSet consensus was for $285.1 million.
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For the current quarter, DocuSign expects revenue of $316 million to $320 million and billings of $333 million to $343 million. Analysts surveyed by FactSet had been modeling $303 million in revenue and $328 million in billings.
Springer said on DocuSign’s earnings call that the company has found new use cases in the pandemic, including as it helped one large state revamp its process of handling emergency unemployment benefits. But other areas have been weaker, including real-estate financing as unemployment crimps demand for new homes, he told MarketWatch.
The company expects to share more in the coming quarters about investments in the notary space given interest from some of its customers in a more simplified notary experience. Some states allow remote online notary services, but even then the rules differ by state.
There’s been a “push from financial institutions to modernize and transform the process,” Springer said.
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DocuSign shares have gained 30% over the past month as the S&P 500 SPX, -0.33% has added about 9%. DocuSign’s stock dropped 5% in Thursday’s regular session on a weak trading day for software names.
