Shares of DocuSign (DOCU) gained in after-hours trading after the electronic signature company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $0.97, which beat analysts’ consensus estimate of $0.81 per share.
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Sales increased by 7% year-over-year, with revenue hitting $736 million. This also beat analysts’ expectations of $727.8 million. Subscription revenue was the main driver of growth, as it made up $717.4 million of total sales and grew by 7%. On the other hand, Professional services and other revenue increased by 2% to $18.7 million.
Interestingly, investors could have anticipated the firm’s solid results by simply looking at DocuSign’s website traffic. As the image below shows, the number of visitors rose during the most recent quarter. In fact, total estimated visits jumped 18.52% when compared to the same quarter of last year.
Guidance for FY 2025
Looking forward, management has provided the following guidance for FY 2025:
- Revenue of between $2,940 million and $2,952 million versus analysts’ estimates of $2,928 million
- Non-GAAP operating margin in the range of 29% to 29.5%
As we can see, the company’s outlook is better than expected, which definitely helped give the stock a slight boost in after-hours trading.
Is DocuSign a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on DOCU stock based on three Buys, nine Holds, and two Sells assigned in the past three months. After a 7.5% rally in its share price over the past year, the average DOCU price target of $63 per share implies 11.07% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
