(RTTNews) - Shares of DocuSign (DOCU) are up over 12% in premarket trading, following strong third-quarter results for fiscal year 2025, reflecting continued growth and strong innovation in the digital agreement space.
Net income for the third quarter ended October 31, 2024, was $209 million, or $0.30 per share, compared to $208 million, or $0.19 per share, in the same period last year.
Revenue for the third quarter of 2024 was $754.8 million, an 8 percent year-over-year increase.
Subscription revenue, which constitutes the majority of the company's revenue, also rose by 8%, reaching $734.7 million. Professional services and other revenue grew by 11 percent, totaling $20.1 million.
Analysts polled by Thomson Reuters were expecting DocuSign to report earnings of $0.87 per share. Analysts estimates typically excluding one-time items.
The company also reported billings of $752.3 million, an increase of 9 percent compared to the same period last year. (Billings are defined as total revenues plus the change in the company's contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period).
DocuSign continued to innovate its Intelligent Agreement Management (IAM) platform, seeing strong early momentum.
New features such as DocuSign Navigator, which includes AI-powered capabilities, predictive search functionality, and integration with third-party platforms like Google Drive and Microsoft OneDrive, were well-received.
The company also announced the global expansion of IAM with DocuSign Maestro and the IAM App Center, following a successful launch in the U.S., Canada, and Australia earlier this year.
Free cash flow for the quarter was $210.7 million, though it slightly decreased compared to $240.3 million in the previous year.
Looking ahead, DocuSign provided guidance for the fourth quarter and fiscal year ending January 31, 2025.
For the fourth quarter ending January 31, 2025, the company expects total revenue to range between $758 million and $762 million. Total revenue was $712.4 million for the quarter ended January 31, 2024.
Wall Street analysts' consensus estimate for the fourth quarter is $758.16 million.
For the fiscal year ending January 31, 2025, the company anticipates total revenue to be in the range of $2,959 million to $2,963 million. Total revenue was $2,761 million in the previous year.
DOCU closed Thursday's (Dec. 05, 2024) trading at $83.68, down 0.37 %. In premarket trading today, the stock is up over 12% at $93.90.
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