Looking forward, the company has raised its revenue and non-GAAP EPS forecasts for 2Q FY2024 and FY2024, which exceeded the upper end of the street estimates. Particularly, it's encouraging to see a 23% YoY growth in FCF, especially considering that its top-line growth came in at 12.3% YoY. The company demonstrated its commitment to cost savings by achieving a 200 bps YoY improvement in non-GAAP gross margin. 1Q24 TakeawayĪs I mentioned, DOCU reported decent earnings results in 1Q FY2024, beating expectations in both revenue and non-GAAP EPS.
#Docusign pricing changes software#
Although the stock is cheaper than the software industry average, without a significant catalyst, it's possible that the stock will maintain a value trap. While leadership changes and ongoing restructuring efforts may contribute to the company's short-term growth slowdown, I'm more concerned about a deterioration of its long-term growth trajectory.ĭespite DOCU's decent 1Q FY2024 earnings results and better-than-expected forward guidance, I believe DocuSign is losing market share due to its single-digit revenue growth outlook. This divergence from the industry growth projections indicates structural headwinds ahead. However, the company only guided a single digit growth of 8.1% in FY2024. According to Deloitte, the eSignature industry is projected to grow 28%-30% CAGR from CY2023 to CY2026. The revenue growth dramatically dropped from 45% YoY in FY2021 to 19% YoY in FY2023. As the pandemic's tailwind faded, the company is facing many challenges in maintaining growth. However, DOCU is not a high growth company anymore. The company significantly benefited from the pandemic as more enterprises adopted electronic signatures in a decentralized working environment, leading to a substantial growth in their customer base and total revenue. DOCU provides an eSignature solution, capturing over 75% market share, which helps businesses manage contracts digitally. DocuSign ( NASDAQ: DOCU) has experienced an initial reaction of 14% rally but reversed its gains and closed at 5% before market closed.
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