Cloud Stocks: DocuSign Sees Digital Signature Trends Here To Stay

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Digital signature player DocuSign (Nasdaq: DOCU) recently announced its first-quarter results that surpassed market expectations. According to a recent report, the global Digital Signature market is projected to grow at over 20% CAGR to reach $3.8 billion by 2027 from $1 billion in 2020. Many had believed that with the economy reopening, demand for services such as those offered by DocuSign would no longer grow as fast. However, the recent results appear to have proven otherwise.

DocuSign’s Financials

Revenues for the first quarter grew 58% to $469.08 million, ahead of the market’s estimates of $436.49 million. Billing grew 54% to $527.4 million. On an adjusted basis, net income was $0.44 per share, compared with the market’s expectations of $0.28 per share.

By segment, Subscription revenues grew 61% to $451.9 million. Professional services and other revenue grew 7% to $17.1 million. Total billings of $527.4M grew 54% over the year and was higher than the market’s consensus of $466.5M.

DocuSign has been focused on expanding its international presence. During the quarter, international revenues grew an impressive 84% to $101 million, making it the 6th consecutive quarter of growth. International revenues now account for 21% of their total revenues.

For the second quarter, DocuSign forecast revenues of $479-$485 million, compared with the Street’s forecast of $486.67 million with an EPS of $0.39. DocuSign expects to end the year with revenues of $2.027-$2.039 billion, below the market’s forecast of $2.05 billion with an EPS of $1.68.

DocuSign’s Notary Product

Recently, DocuSign announced its new product, DocuSign Notary. The product is built on the flagship eSignature solution and utilizes capabilities that were added from its $38 million acquisition of Liveoak Technologies from the previous year. Notary uses secure identity-proofing technologies to lower the risk of fraud, provide a detailed audit trail in addition to a tamper-evident Certificate of Completion and recorded sessions. It enables real-time remote collaboration between notaries public and signers. It can be used on web browsers without the need for additional apps, downloads, or plugins. For customers that need to automate repeatable notarization-specific tasks, the Notary API can be used with DocuSign’s eSignature API. The service is not yet available across the country but is available in 17 states that have currently granted permission for these services.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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