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September 01, 2020 1:29pm
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What To Expect From DocuSign’s (DOCU) Q3 Earnings

DOCU Cover Image

E-signature company DocuSign (DOCU) will be reporting results tomorrow after market close. Here’s what investors should know.

DocuSign beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $736 million, up 7% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and revenue guidance for next quarter slightly topping analysts’ expectations.

Is DocuSign a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting DocuSign’s revenue to grow 6.4% year on year to $745.3 million, slowing from the 8.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.87 per share.

DocuSign Total Revenue

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. DocuSign has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 1.9% on average.

Looking at DocuSign’s peers in the productivity software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Box delivered year-on-year revenue growth of 5.5%, meeting analysts’ expectations, and Dropbox reported flat revenue, in line with consensus estimates. Dropbox traded down 3% following the results.

Read our full analysis of Box’s results here and Dropbox’s results here.

There has been positive sentiment among investors in the productivity software segment, with share prices up 16.8% on average over the last month. DocuSign is up 11.6% during the same time and is heading into earnings with an average analyst price target of $69.19 (compared to the current share price of $80.60).

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