DocuSign's (DOCU) Q2 Earnings Beat Estimates, Stock Up 10.5%

DocuSign, Inc. DOCU reported impressive second-quarter fiscal 2023 (ended Jul 31, 2022) results, with both earnings and revenues surpassing the Zacks Consensus Estimate.

Better-than-expected results pleased investors as the stock has risen more than 10.5% since the date of earnings release on Sep 8.

Non-GAAP earnings per share (excluding 66 cents from non-recurring items) of 44 cents beat the consensus mark by 4.8% but decreased 6.4% from the year-ago fiscal quarter’s reported figure. Revenues of $622.2 million also surpassed the Zacks Consensus Estimate by 3.3% and increased 21.6% from the year-ago fiscal quarter’s reported figure.

Shares have gained 8.3% over the past three-month period compared with 13.3% rally of the industry it belongs to.

Image Source: Zacks Investment Research

Quarter in Detail

Subscription revenues came in at $605.2 million, up 23% year over year. Professional services and other revenues decreased 11% from the year-ago fiscal quarter’s reported figure to $17 million. International revenues increased 35% from the year-ago fiscal quarter’s reported figure and contributed 25% to total revenues. Billings of $647.7 million were up 9% from the year-ago fiscal quarter’s reported figure. DocuSign added 44,000 customers in the quarter, increasing the total global customer base to 1.28 million.

Non-GAAP gross margin of 82% was flat year over year. Non-GAAP operating profit of $112.2 million increased 12.5% year over year. Non-GAAP operating margin of 18% declined from 19% in the year-ago quarter.

DocuSign ended the quarter with a cash and cash equivalent balance of $637.2 million compared with $638.2 million at the end of the previous quarter. DOCU generated $120.9 million of cash from operating activities and a capex of $15.4 million. Non-GAAP free cash flow was $105.5 million.

DocuSign Price, Consensus and EPS Surprise

DocuSign price-consensus-eps-surprise-chart | DocuSign Quote

Guidance

For the third quarter of fiscal 2023, DocuSign expects revenues in the range of $624-$628 million. The midpoint of the guided range ($626 million) is lower than the current Zacks Consensus Estimate of $654.9 million. Billings are expected between $584 million and $594 million. Non-GAAP gross margin is anticipated between 79% and 81%. Non-GAAP operating margin is expected between 16% and 18%.

For fiscal 2023, DocuSign still expects revenues in the range of $2.47-$2.482 billion. The Zacks Consensus Estimate is currently pegged at $2.47 billion. Billings are expected between $2.55 billion and $2.57 billion. Non-GAAP gross margin is anticipated between 79% and 81%. Non-GAAP operating margin is expected between 16% and 18%.

DocuSign currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
 

This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation

Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera or refrigerator (and that’s just the tip of the iceberg), you have a need for semiconductors. That’s why their importance can’t be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. Shockwaves to the international supply chain from the global pandemic have unearthed a tremendous opportunity for investors. And today, Zacks' leading stock strategist is revealing the one semiconductor stock that stands to gain the most in a new FREE report. It's yours at no cost and with no obligation.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.