DocuSign's stock falls as executive changes cast shadow on strong earnings and revenue beat

DocuSign’s stock falls as executive changes cast shadow on strong earnings and revenue beat

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Shares of DocuSign Inc. fell more than 7% in extended trading today as an executive leadership shakeup overshadowed an impressive fourth quarter earnings and revenue beat.

The biggest change is that DocuSign’s chief financial officer Cynthia Gaylor is to step down from her role later this year, having only joined the company in September 2020. While no reason was given for her departure, DocuSign felt compelled to state that the decision was “not a result of any disagreement” regarding the company’s financial statements or disclosures.

Gaylor will at least hang around until a replacement CFO has been found, DocuSign said, to help ensure an orderly transition.

“Cynthia has been an instrumental part of DocuSign’s story. We have benefited from her unwavering commitment and leadership these last few years, and we are grateful for the strong foundation she leaves behind,” said DocuSign Chief Executive Allan Thygesen.

In other changes, DocuSign announced that it has hired former Atlassian Corp. Plc executive Robert Chatwani as its new president and general manager of growth. Meanwhile, Anwer Akram is joining the company from Google LLC to become its new chief operating officer.

DocuSign is no stranger to executive shake ups. Last year, the company’s board of directors ousted its former CEO Dan Springer, following a string of disappointing quarterly financial results. He was replaced by Thygesen in August. Furthermore, the company has announced two rounds of layoffs as it struggles to streamline its operations amid a tough economy. The first came in September, when it announced it was cutting more than 700 jobs, or around 9% of its staff, and that was followed by a second round last month, when it cut another 700 jobs.

As harsh as the job cuts may have been, they do appear to have helped put the company in a much healthier position financially, at least. In its fourth quarter results announced today, DocuSign reported a net income of $4.86 million, up from a loss of $30.45 million one year earlier.

Earnings before certain costs such as stock compensation came to 65 cents per share, while revenue rose 14% to $659.6 million. The results were much better than expected, with Wall Street analysts modeling earnings of just 52 cents per share on sales of $640.8 million.

DocuSign said its subscription revenue accounted for $643.7 million, up 14%, while professional services and other revenue came to $15.9 million, down 5%. Fiscal 2023 revenue came to $2.5 billion, up 19% year-over-year.

“We are reshaping DocuSign to invest in our innovation roadmap and self-service capabilities,” Thygesen said in a statement. “Looking ahead, we aim to drive profitable growth at scale by executing our mission of smarter, easier, and trusted agreements.”

For the first quarter, DocuSign said it’s forecasting revenue of between $639 million and $643 million, and for fiscal 2024 it sees a range of $2.695 billion to $2.71 billion. Wall Street is looking for revenue of $639.8 million for the first quarter, and $2.69 billion for the full year.

Photo: Shoptalk/YouTube

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