What To Expect From DocuSign’s (DOCU) Q2 Earnings

Kayode Omotosho /
2022/09/07 4:41 am EDT
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E-signature company DocuSign (DOCU) will be reporting earnings tomorrow after the bell. Here's what to expect.

Last quarter DocuSign reported revenues of $588.6 million, up 25.4% year on year, beating analyst revenue expectations by 1.19%. It was a mixed quarter for the company, with a solid revenue growth but guidance for the next quarter below analysts' estimates.

Is DocuSign buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting DocuSign's revenue to grow 17.6% year on year to $602.2 million, slowing down from the 49.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.42 per share.

DocuSign Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing two downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 4.83%.

Looking at DocuSign's peers in the software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Dropbox delivered top-line growth of 7.93% year on year, beating analyst estimates by 0.25% and Box reported revenues up 14.6% year on year, exceeding estimates by 0.09%. Dropbox traded flat on the results, Box was down 3.41%. Read our full analysis of Dropbox's results here and Box's results here.

The technology sell-off has been putting pressure on stocks since November and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 14.2% over the last month. DocuSign is down 25.4% during the same time, and is heading into the earnings with analyst price target of $70.4, compared to share price of $53.91.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.