DocuSign shares rose more than 3% Friday morning following third-quarter results that topped expectations.
The electronic signature software company posted adjusted earnings of $0.79 per share, topping expectations of $0.63 per share. Revenue was $700.4 million, up from $645.5 million a year earlier and above Street expectations of $690 million.
The results showed, “continued strength with its core technology while demonstrating continued operating leverage in the business model despite the current macro headwinds,” analysts at Wedbush wrote.
The firm also pointed to DocuSign’s potential with artificial intelligence.
“Subscription revenue coming in at $682.4 million above the Street’s $671.2 million estimate as the recent implementations of generative AI stimulate further growth in the pipeline,” the analysts wrote.
“We continue seeing DocuSign putting itself in a strong position to capitalize on growing demand for AI applications with differentiated offerings for both agreement workflow products and intelligent agreement management while expanding its sticky install base,” they added.
Looking ahead, the company guided for fourth-quarter sales of $696 million to $700 million, compared to analyst expectations of $694 million.
The firm maintained its Neutral rating and lowered its price target from $67 to $56.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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