shares are falling hard after the digital signature software company provided disappointing guidance for the April quarter. It’s the second quarter in a row that the outlook has fallen short of Street estimates and spurred a selloff.
DocuSign stock (ticker: DOCU) were down nearly 16% at $79.25 late on Thursday afternoon. The stock is now off about 75% since peaking above $300 last summer.
For the fiscal fourth quarter, ended Jan. 31, DocuSign posted revenue of $580.8 million, up 35% from a year earlier, and above the range of $557 million to $563 million management it had forecasted. The Wall Street consensus forecast had been for $561 million. Billings were $670.1 million, up 25%, and likewise above the company’s target range of $647 million to $649 million.
On an adjusted basis, the company earned 48 cents a share, a penny better than the Street consensus forecast. Under generally accepted accounting principles, the company lost 15 cents a share.
For the full fiscal year, revenue was $2.1 billion, up 45%, while billings were $2.4 billion, up 27%. Non-GAAP profits were $1.98 a share, while on a GAAP basis, the company lost 36 cents a share for the year.
The issue was guidance.
DocuSign is projecting April quarter revenue of $579 million to $583 million, falling short of the former Street consensus of $594 million, and about flat with the January quarter. For the January 2023 fiscal year, DocuSign said it expects revenue of $2.47 billion to $2.482 billion, well below the Street consensus of $2.61 billion—a range whose midpoint implies 18% growth. The company sees full year billings of $2.706 billion to $2.726 billion, which implies 13% growth at the midpoint of the range.
CEO Dan Springer said in an interview that several factors have slowed the company’s growth. One is that there were some one-time use cases during the pandemic that haven’t recurred – like the federal government’s Payroll Protection Program, or PPP, loans. He also noted that some companies bought more volume on the platform a year ago that they may have required, resulting in flattish renewals. And he also said the company has had some sales execution issues returning to a more normal sales environment emerging from pandemic, and Springer is making changes changes in the organization’s leadership.
“As we head into fiscal 2023, digital transformation and the need to agree from anywhere remains a high priority for organizations across the globe,” Springer added in a statement. “As people begin to return to the office, they are not returning to paper.”
The company also said its board has approved the repurchase of up to $200 million of its common stock.
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