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Docusign, Inc. (DOCU - Free Report) reported impressive second-quarter fiscal 2025 results, wherein earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate.
The stock price has not witnessed any significant impact of the earnings beat since the company released results on Sept. 5, 2024.
DOCU’s EPS (excluding $3.29 from non-recurring items) was 97 cents per share, which surpassed the Zacks Consensus Estimate by 21.3% and increased 34.7% from the year-ago quarter. Total revenues of $736 million beat the consensus mark by 1.4% and gained 7% from second-quarter fiscal 2024.
The company’s shares have gained 7.6% in the past three months against the 1.4% decline of the industry it belongs to and compared with the marginal rise of the Zacks S&P 500.
Subscription revenues totaled $717.4 million, increasing 7% year over year. The figure beat our estimate of $707.9 million. Professional services and other revenues of $18.7 million gained 2% from the year-ago quarter, outpacing our estimate of $17.2 million. Billings amounted to $724.5 million, up 2% from the year-ago quarter. The figure surpassed our estimate of $721.7 million.
The non-GAAP gross margin was 82.2%, beating our estimate of 81.3%. The non-GAAP gross profit of $587.4 million grew 6.9% year over year and missed our expectation of $589.8 million. The non-GAAP operating margin was 32.2%, increasing by 750 basis points from the year-ago quarter. It beat our estimate of 27.2%.
Balance Sheet & Cash Flow of Docusign
Docusign exited second-quarter fiscal 2025 with cash and cash equivalents of $619.1 million compared with $817.4 billion at the end of the preceding quarter. Net cash generated by operating activities was $220.2 million for the quarter. The free cash flow generated was $197.9 million.
DOCU’s Q3 & FY25 Guidance
For the third quarter of fiscal 2025, the company raised its guidance for total revenues to $743-$747 million from the $725-$729 million mentioned in the preceding quarter. The Zacks Consensus Estimate for revenues is pegged at $739 million, which is lower than the company’s raised guided range.
DOCU increased its guidance for subscription revenues to $722-$726 million from the preceding quarter’s view of $705-709 million. The company reduced billings guidance to $710-$720 million from the $715-$725 million provided in first-quarter fiscal 2025. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 28.5-29.5%, respectively.
For fiscal 2025, the company raised its guidance for total revenues to $2.94-$2.95 billion from the $2.92-$2.93 provided in the preceding quarter. The Zacks Consensus Estimate for revenues is pegged at $2.93 million, which is lower than the company’s raised guided range.
Subscription revenue guidance was raised to $2.86-$2.87 billion from the preceding quarter’s $2.84-$2.85 billion. Billings’ guidance is updated to $2.99-$3.03 billion from the prior quarter’s $2.98-$3.03 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 29-29.5%, respectively.
MAN’s quarterly adjusted earnings of $1.3 per share surpassed the consensus mark by 2.4% but declined 17.7% year over year due to run-off Proservia Germany business and Argentina-related currency translation losses. Revenues of $4.5 billion lagged the consensus mark by a slight margin and dipped 6.9% year over year on a reported basis and 3% on a constant-currency basis.
Omnicom Group Inc. (OMC - Free Report) reported impressive second-quarter 2024 results.
OMC’s earnings of $1.95 per share beat the consensus estimate by 3.7% and gained 7.7% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 1.1% and increased 6.8% on a year-over-year basis.
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Docusign Shares Barely Move After Posting Q2 Earnings & Revenues Beat
Docusign, Inc. (DOCU - Free Report) reported impressive second-quarter fiscal 2025 results, wherein earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate.
The stock price has not witnessed any significant impact of the earnings beat since the company released results on Sept. 5, 2024.
DOCU’s EPS (excluding $3.29 from non-recurring items) was 97 cents per share, which surpassed the Zacks Consensus Estimate by 21.3% and increased 34.7% from the year-ago quarter. Total revenues of $736 million beat the consensus mark by 1.4% and gained 7% from second-quarter fiscal 2024.
The company’s shares have gained 7.6% in the past three months against the 1.4% decline of the industry it belongs to and compared with the marginal rise of the Zacks S&P 500.
Docusign Inc. Price and EPS Surprise
Docusign Inc. price-eps-surprise | Docusign Inc. Quote
DOCU’s Segmental Revenues
Subscription revenues totaled $717.4 million, increasing 7% year over year. The figure beat our estimate of $707.9 million. Professional services and other revenues of $18.7 million gained 2% from the year-ago quarter, outpacing our estimate of $17.2 million. Billings amounted to $724.5 million, up 2% from the year-ago quarter. The figure surpassed our estimate of $721.7 million.
The non-GAAP gross margin was 82.2%, beating our estimate of 81.3%. The non-GAAP gross profit of $587.4 million grew 6.9% year over year and missed our expectation of $589.8 million. The non-GAAP operating margin was 32.2%, increasing by 750 basis points from the year-ago quarter. It beat our estimate of 27.2%.
Balance Sheet & Cash Flow of Docusign
Docusign exited second-quarter fiscal 2025 with cash and cash equivalents of $619.1 million compared with $817.4 billion at the end of the preceding quarter. Net cash generated by operating activities was $220.2 million for the quarter. The free cash flow generated was $197.9 million.
DOCU’s Q3 & FY25 Guidance
For the third quarter of fiscal 2025, the company raised its guidance for total revenues to $743-$747 million from the $725-$729 million mentioned in the preceding quarter. The Zacks Consensus Estimate for revenues is pegged at $739 million, which is lower than the company’s raised guided range.
DOCU increased its guidance for subscription revenues to $722-$726 million from the preceding quarter’s view of $705-709 million. The company reduced billings guidance to $710-$720 million from the $715-$725 million provided in first-quarter fiscal 2025. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 28.5-29.5%, respectively.
For fiscal 2025, the company raised its guidance for total revenues to $2.94-$2.95 billion from the $2.92-$2.93 provided in the preceding quarter. The Zacks Consensus Estimate for revenues is pegged at $2.93 million, which is lower than the company’s raised guided range.
Subscription revenue guidance was raised to $2.86-$2.87 billion from the preceding quarter’s $2.84-$2.85 billion. Billings’ guidance is updated to $2.99-$3.03 billion from the prior quarter’s $2.98-$3.03 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 29-29.5%, respectively.
Currently, Docusign carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
ManpowerGroup Inc. (MAN - Free Report) reported mixed second-quarter 2024 results.
MAN’s quarterly adjusted earnings of $1.3 per share surpassed the consensus mark by 2.4% but declined 17.7% year over year due to run-off Proservia Germany business and Argentina-related currency translation losses. Revenues of $4.5 billion lagged the consensus mark by a slight margin and dipped 6.9% year over year on a reported basis and 3% on a constant-currency basis.
Omnicom Group Inc. (OMC - Free Report) reported impressive second-quarter 2024 results.
OMC’s earnings of $1.95 per share beat the consensus estimate by 3.7% and gained 7.7% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 1.1% and increased 6.8% on a year-over-year basis.