DocuSign Inc. shares fell more than 25% in after-hours trading Thursday after the company's billings and revenue forecast missed expectations and its chief executive admitted a pandemic boom wore off in the quarter.
DocuSign DOCU, easily topped third-quarter expectations with its earnings report on Thursday afternoon, but the company s billings, which reflect future business under contract, and fourth-quarter forecast came in lighter than expected. The COVID-19 epidemic appeared to be dissipating, according to the chief executive of the electronic-signature company.
After six quarters of accelerated growth, customers returned to normalized buying patterns, resulting in 28% year-over-year billings growth, CEO Don Springer said on Thursday. DocuSign shares dove more than 25% to prices that would be a 52 week low in the extended session, a move that would wipe away more than $10 billion in market value if it continues through Friday s trading session. When the epidemic began, DocuSign was worth less than $20 billion but rose to a market cap of more than $40 billion beginning in April 2020, as businesses tried to complete deals without the ability to sign documents in person. DocuSign reported a third quarter loss of $5.7 million, or 3 cents a share, on sales of $545.5 million, up from $382.9 million a year ago. The company reported earnings of 58 cents a share, up from 22 cents a share a year ago after adjusting for stock-based compensation and other effects. According to FactSet, analysts on average expected adjusted earnings of 46 cents a share on sales of $532.6 million were easily cleared by DocuSign. The company reported billings of $565.2 million, short of its own guidance for $585 million to $597 million and analysts average forecast of $594 million. For the fourth quarter, Management guided revenue from $557 million to $563 million and billings of $647 million to $659 million while analysts were expecting sales of $575 million and billings of $705.4 million, according to FactSet. After spiking early in the epidemic, DocuSign shares had already leveled off in 2021, gaining 5.2% this year, as the S&P 500 index SPX went up 20.2%.