Tech stock under pressure: Docusign Inc (NASDAQ: DOCU)

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Docusign Inc (NASDAQ: DOCU) stock rose 2.06% after the company topped consensus estimates for earnings and issued better-than-expected guidance. The company reported fourth-quarter net losses of $37.2 million compared with $6.4 million in the year-ago period. On a non-GAAP basis, the company posted an operating profit of $7 million for the quarter, and generated $23 million in free cash flow. This means the company  is exiting the first year as a public company with annual revenue of $701 million, reflecting 35% growth and a positive non-GAAP operating margin of 2%. At the end of Q4 the company had 477,000 paying customers, an increase of 22,000 since Q3 and more than 100,000 since this time last year. The number of the enterprise and commercial customers grew to 56,000 in Q4, an increase of 32% year-over-year. Net dollar retention was 112% in Q4 and remained within the historical range of 112-119%. DOCU generated record operating cash flow of $34 million in the fourth quarter, compared with $32 million in the same quarter last year.

DOCU in the fourth quarter of FY 19 has reported the adjusted earnings per share of 6 cents, beating the analysts’ estimates for the adjusted earnings per share of 1 cents. The company had reported the adjusted revenue growth of 34 percent to $199.7 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $193.7 million. Subscription revenue grew 37% year-over-year in the fourth quarter to $188 million or 94% of total revenue. Fourth quarter billings rose 31% year-over-year to a record $262 million dollars. For the full year billings increased 34% to $801 million. Total international revenues grew at 26% year-over-year. This lower percentage growth for total international revenues relates to the sunsetting of legacy acquired products. Gross margin for the fourth quarter was 78% compared with 80% in last year’s fourth quarter, primarily due to the impact of Spring CM’s lower margins. Operating leverage improved in Q4 as sales and marketing had a seasonal decrease as a percentage of revenue and GNA expenses returned to more normalized level after the equity and debt transactions.

For the first quarter of 2020, analysts model adjusted earnings of 4 cents a share on sales of $197.7 million. The company said it expects first-quarter revenue of $205 million to $210 million and full-year revenue of $910 million to $915 million. Analysts expect full-year revenue of $861.6 million.

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