DocuSign, Inc. (NASDAQ:DOCU) has reported robust financial results for the second quarter of fiscal 2024, which ended on July 31st. Both earnings and revenues exceeded expectations, marking significant year-over-year growth. However, despite these impressive numbers, the company’s stock price has experienced a 10% decline since the earnings release on September 7th.
In terms of earnings, DocuSign delivered non-GAAP earnings per share of 72 cents, surpassing the consensus estimate by 10.8%. This figure represents a remarkable 50% increase compared to the earnings reported in the same fiscal quarter last year. Revenues for the quarter reached $687.7 million, outperforming the consensus estimate by 1.6% and reflecting a 10.5% growth compared to the previous year’s fiscal quarter.
Digging deeper into the quarterly performance, subscription revenues stood at $669.4 million, a 10.6% year-over-year increase, which exceeded expectations by 1.5%. Professional services and other revenues also showed growth, rising by 7.8% compared to the same period last year, totaling $18.3 million.
Billings for the quarter amounted to $711.2 million, a 10% increase from the previous year’s figure, surpassing expectations by 9.3%. The non-GAAP gross margin remained steady at 82%, in line with both the year-ago margin and analysts’ estimates. Additionally, the non-GAAP gross profit grew by 11.3% year over year, totaling $565.8 million, exceeding expectations by 2.3%. The non-GAAP operating margin expanded to 25%, up from the previous year’s 18%.
In terms of the company’s financial position, DocuSign reported cash and cash equivalents of $1.02 billion at the end of the quarter, compared to $940.5 million in the previous quarter. Operating activities generated $211 million in cash, with capital expenditures amounting to $27.4 million, resulting in a non-GAAP free cash flow of $183.6 million.
Looking ahead, DocuSign provided guidance for the third quarter, anticipating revenues in the range of $687 million to $691 million, an upward revision from the previous estimate of $675 million to $679 million. The Zacks Consensus Estimate for revenues is slightly lower at $683.8 million. In terms of segmental revenues, subscription revenues are expected to range between $669 million and $673 million, while billings are projected to be in the range of approximately $668 million to $678 million. The company expects non-GAAP gross margin and non-GAAP operating margin to range from 81% to 82% and 22% to 23%, respectively.
For fiscal 2024, DocuSign forecasts revenues in the range of $2.725 billion to $2.737 billion, up from the previous guidance of $2.71 billion to $2.73 billion. The Zacks Consensus Estimate for revenues stands slightly lower at $2.72 billion. In segmental revenues, subscription revenues are expected to range between $2.649 billion and $2.661 billion, with billings projected to be in the range of $2.804 billion to $2.824 billion. The company also expects non-GAAP gross margin and non-GAAP operating margin to range from 81% to 82% and 23% to 24%, respectively.
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