DocuSign skyrockets 24% after smashing sales forecasts

DocuSign

• Shares of DocuSign surged as much as 24% on Friday after the company posted revenue that beat Wall Street expectations.
• The company reported total revenue of $235.6 million in the second quarter, up from 41% during the same period last year.
• Wedbush analyst Daniel Ives upgraded the stock to "outperform" from "neutral" and raised his price target to $65 from $48. Ives cited DocuSign's growing revenues and total billings as the drivers for the upgrade.
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Shares of DocuSign skyrocketed more than 20% on Friday after the company posted second-quarter revenue that surpassed analyst estimates.

Here are the key numbers from DocuSign's second quarter earnings report:

• Revenue: $235.61 million, compared to $220 million expected by analysts
• Earnings per share: (-$0.39), compared to (-$0.30) predicted by analysts
• Net income: $1.99 million, versus $6 million estimated by analysts.

DocuSign, which offers a variety of cloud-based solutions for signing and managing agreements and contracts, posted a larger loss than Wall Street analysts expected for the second quarter. The company's net loss appeared to be offset by revenue growth of 40% from the same period last year, and a 47% jump in total billings.

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"Our second quarter performance reflects our clear leadership position in e-signature and increasing adoption of our broader Agreement Cloud offering," Chief Executive Officer Dan Springer said in an earnings release. "We added 29,000 new customers onto the platform, bringing our total to 537,000 worldwide.

Subscription revenue accounted for $220 million of DocuSign's sales during the second quarter, a 39% increase from last year. Professional services and other revenue increase 72% to $14.8 million.

Wedbush analyst Daniel Ives upgraded the company's rating to 'Outperform' from 'Neutral' and increased his price target to $65 from $48. Ives cited DocuSign's revenue and billings growth as the main reason for the upgrade.

"This company is in the early innings of a massive green field growth opportunity set to play out over the next 12 to 18 months," Ives said in a note to clients on Friday.

DocuSign is up more than 34% year-to-date.

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