synopsis

DocuSign's third-quarter billings rose 9% to $752.3 million, faster than the 2% growth in the second quarter.

DocuSign, Inc. ($DOCU) shares are on track to open at the highest level since late April 2022 after the cloud platform provider that allows individuals and businesses to electronically sign and share documents announced solid fiscal year 2025 third-quarter results.

The San Francisco, California-based company reported third-quarter non-GAAP earnings per share of $0.90, up from $0.79 a year ago and exceeding the consensus estimate of $0.87.

Total revenue rose 8% year-over-year (YoY) to $754.8 million, better than the average analysts’ estimate of $745.25 million. Subscription revenue, accounting for over 97% of the total revenue, climbed 8%.

Both top- and bottom-line results were ahead of the guidance issued in early September. 

Among operational metrics, billings rose 9% to $752.3 million, faster than the 2% growth in the second quarter.

Non-GAAP gross margin contracted YoY from 83% to 82.5%.

The company ended the quarter with a cash position of $1.1 billion. 

Allan Thygesen, CEO of Docusign, said, "Docusign delivered powerful new innovation for customers highlighted by new capabilities to its Intelligent Agreement Management ("IAM") platform."

“In Q3, early IAM momentum outpaced expectations, and we continued to drive improvement in our core business with strong revenue growth and operating profit."

Looking ahead, DocuSign raised its fiscal year 2025 guidance across metrics. The company now expects revenue of $2.959 billion-$2.963 billion, up from its previous outlook of $2.940 billion-$2.952 billion. The consensus estimate currently calls for revenue of $2.95 billion.

The company upped its subscription revenue guidance to $2.885 billion-$2.889 billion, billings guidance to $3.056 billion-$3.066 billion, and non-GAAP gross and operating margin guidance to 81.9%-82.1% and 29.5%-29.7%, respectively.

On Stocktwits, sentiment toward the stock stayed ‘extremely bullish’ (96/100), with the degree of bullishness improving from a day ago. 

Message volume also remained ‘extremely high.’

DocuSign shares, which closed Thursday’s regular session down 0.37% at $83.68, climbed 14.36% to $95.70 in the after-hours trading. The stock has added nearly 41% this year.

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