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      DocuSign, Inc. (DOCU) Plummets After Hours Despite Improved Q3 Earnings. Why? - Stocks Telegraph

      By Gule Rukhsar

      Published on

      December 3, 2021

      5:10 AM UTC

      DocuSign, Inc. (DOCU) Plummets After Hours Despite Improved Q3 Earnings. Why? - Stocks Telegraph

      DocuSign, Inc. (DOCU) plunged 29.70% in the aftermarket, at $164.37 after the company announced its third-quarter financial results. In regular trading, the stock was up by 1.31%, gaining $3.03 to close at $233.82 with a volume of 8.06 million. After the company announced Q3 earnings, the stock lost over $69 in the after-hours at 5.06 million shares. The decline in the stock has led DOCU’s three-month loss to reach 20.62%.

      Incorporated in 2003, DocuSign, Inc. provides cloud-based software for e-signature solutions to businesses internationally. Currently, DOCU has 196.72 million outstanding shares trading at a capital of $45.4 billion in the market.

      What’s Happening with DOCU?

      As the company deals in cloud-based e-signature solutions that are accessible online remotely, the company’s demand surged in the pandemic. The Covid-19 led almost all businesses to operate online/remotely, hence increasing the demand for more online solutions in the market. With the increased demand for the company’s solutions, the investors expected DOCU to post great Q3 earnings. While the earnings did beat the EPS and revenue estimates, they failed to impress the investors. The company’s earnings showed signs of slowing demand and provided lower guidance.

      As most businesses are returning to normal working in the offices, it is only natural for DOCU’s services’ demand to go down. This situation led the stock to tumble in the after-hours on Thursday.

      The Q3 Earnings

      On December 02, DocuSign, Inc. (DOCU) announced its third-quarter fiscal 2022 financial results. As per the third quarter fiscal 2022, the total revenue was $545.5 million compared to the consensus estimate of $532.6 million. The total revenue showed growth of 42% year-over-year. Furthermore, the subscription revenue showed an increase of 44% year-over-year and professional and other revenue 4% year-over-year.

      Moreover, the non-GAAP net income per diluted share was $0.58 in the third quarter fiscal 2022, versus the estimated EPS of $0.46 for the quarter. In the year-ago period, the non-GAAP net income per diluted share was $0.22.

      In addition, DOCU also surpassed the billings by showing 28% year-over-year growth at $565.2 million.

      DOCU’s Future Guidance

      DocuSign, Inc. provided guidance for its upcoming fourth quarter as well as the fiscal year 2022, ending January 31, 2022. As per the guidance, the company expects Q4 revenue to be in the range of $557 million to $563 million. Further, for the full fiscal year 2022, the revenue is expected to be somewhere between $2,083 million and $2,089 million.

      The future guidance of the company fell short of analysts’ expectations and failed to impress the investors.

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