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DocuSign, Inc. (DOCU - Free Report) reported impressive third-quarter fiscal 2024 (ended Oct 31) results, wherein both its earnings and revenues beat their respective Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 60 cents from non-recurring items) of 79 cents beat the consensus mark by 29.5% and grew 38.6% from the year-ago quarter’s reported figure. Revenues of $700.4 million also surpassed the consensus estimate by 1.6% and increased 8.5% from the year-ago quarter’s reported actual.
Quarter in Detail
Subscription revenues totaled $682.4 million, up 9% year over year. The figure beat our estimate by 3%. Professional services and other revenues for the reported quarter missed our estimate by 10.6% and decreased 16% from the year-ago quarter’s reported figure to $18.1 million.
For the reported quarter, billings amounted to $691.8 million, up 5% from the year-ago quarter’s reported figure. The figure beat our estimate by 3.2%. The non-GAAP gross margin was 83%, in line with the year-ago level. The figure beat our estimate of 81.7%. The non-GAAP gross profit of $581.4 million increased 8.1% year over year and surpassed our estimate by 3.3%. The non-GAAP operating margin was 27%, up from the year-ago level of 23%.
Balance Sheet & Cash Flow
DocuSign ended the quarter with cash and cash equivalents of $1.18 billion compared with $1.02 billion at the end of the previous quarter. It generated $264.2 million in cash from operating activities and a capex of $23.8 million. Non-GAAP free cash flow was $240.3 million.
Fourth-Quarter Guidance
The company expects revenues to be in the range of $696-$700 million. The Zacks Consensus Estimate for revenues is pegged lower at $689.2 million.
In segmental revenues, subscription revenues are expected in the $679-$683 million band. Billings are expected in the range of around $758-$768 million. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 22.5-23.5%, respectively.
Fiscal 2024 Guidance
The company expects revenues in the range of $2.746-$2.750 billion compared with the previous guidance of $2.725-$2.737 billion. The Zacks Consensus Estimate for revenues is pegged at $2.73 billion.
In segmental revenues, subscription revenues are expected in the $2.670-$2.674 billion band, up from the previously estimated range of $2.649-$2.661 billion. Billings are expected in the band of $2.835-$2.845 billion, up from the previously guided range of $2.804-$2.824 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be in the band of 81.5-82.5% and 24-25%, respectively.
A few better-ranked stocks from the broader Business Services sector that have performed well in their recent earnings releases have been discussed below.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results, wherein both earnings and revenues beat their respective Zacks Consensus Estimate.
SPGI’s adjusted earnings per share (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in all divisions.
Verisk Analytics Inc.(VRSK - Free Report) reported impressive third-quarter 2023 results wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in underwriting data solutions, life insurance and extreme events solutions.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein both earnings and revenues surpassed their respective Zacks Consensus Estimate.
FI’s adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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DocuSign (DOCU) Beats on Q3 Earnings and Revenues
DocuSign, Inc. (DOCU - Free Report) reported impressive third-quarter fiscal 2024 (ended Oct 31) results, wherein both its earnings and revenues beat their respective Zacks Consensus Estimate.
Non-GAAP earnings per share (excluding 60 cents from non-recurring items) of 79 cents beat the consensus mark by 29.5% and grew 38.6% from the year-ago quarter’s reported figure. Revenues of $700.4 million also surpassed the consensus estimate by 1.6% and increased 8.5% from the year-ago quarter’s reported actual.
Quarter in Detail
Subscription revenues totaled $682.4 million, up 9% year over year. The figure beat our estimate by 3%. Professional services and other revenues for the reported quarter missed our estimate by 10.6% and decreased 16% from the year-ago quarter’s reported figure to $18.1 million.
DocuSign Price, Consensus and EPS Surprise
DocuSign price-consensus-eps-surprise-chart | DocuSign Quote
For the reported quarter, billings amounted to $691.8 million, up 5% from the year-ago quarter’s reported figure. The figure beat our estimate by 3.2%. The non-GAAP gross margin was 83%, in line with the year-ago level. The figure beat our estimate of 81.7%. The non-GAAP gross profit of $581.4 million increased 8.1% year over year and surpassed our estimate by 3.3%. The non-GAAP operating margin was 27%, up from the year-ago level of 23%.
Balance Sheet & Cash Flow
DocuSign ended the quarter with cash and cash equivalents of $1.18 billion compared with $1.02 billion at the end of the previous quarter. It generated $264.2 million in cash from operating activities and a capex of $23.8 million. Non-GAAP free cash flow was $240.3 million.
Fourth-Quarter Guidance
The company expects revenues to be in the range of $696-$700 million. The Zacks Consensus Estimate for revenues is pegged lower at $689.2 million.
In segmental revenues, subscription revenues are expected in the $679-$683 million band. Billings are expected in the range of around $758-$768 million. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 22.5-23.5%, respectively.
Fiscal 2024 Guidance
The company expects revenues in the range of $2.746-$2.750 billion compared with the previous guidance of $2.725-$2.737 billion. The Zacks Consensus Estimate for revenues is pegged at $2.73 billion.
In segmental revenues, subscription revenues are expected in the $2.670-$2.674 billion band, up from the previously estimated range of $2.649-$2.661 billion. Billings are expected in the band of $2.835-$2.845 billion, up from the previously guided range of $2.804-$2.824 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be in the band of 81.5-82.5% and 24-25%, respectively.
Currently, DocuSign carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
A few better-ranked stocks from the broader Business Services sector that have performed well in their recent earnings releases have been discussed below.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results, wherein both earnings and revenues beat their respective Zacks Consensus Estimate.
SPGI’s adjusted earnings per share (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in all divisions.
Verisk Analytics Inc.(VRSK - Free Report) reported impressive third-quarter 2023 results wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in underwriting data solutions, life insurance and extreme events solutions.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein both earnings and revenues surpassed their respective Zacks Consensus Estimate.
FI’s adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.