DocuSign's (DOCUS) Q4 performance and guidance both exceeded expectations, causing the stock price to surge 17% in after-hours trading.

After the US stock market closed on Thursday, the electronic signature provider DocuSign (DOCU.US) announced better-than-expected fourth-quarter results. Boosted by this, the company's stock price soared 17% in after-hours trading. According to the financial report, in the fourth quarter ending January 31, 2024, DocuSign's revenue grew 8% year-on-year to $712 million, surpassing the market expectation of $699 million. Net profit was $27.2 million, or earnings of 13 cents per share, higher than the $4.9 million, or earnings of 2 cents per share, in the same period last year. Adjusted earnings per share were $0.76, exceeding the market expectation of $0.65. In the fourth quarter, the company's free cash flow was $2.486 billion, up from $1.13 billion in the same period last year. Looking ahead, DocuSign expects to generate revenue of $704 million to $708 million in the first quarter of fiscal year 2025, surpassing analysts' expectations of $699.1 million. The full-year revenue is estimated to be between $29.1 billion and $29.2 billion, in line with market expectations. DocuSign CEO Allan Thygesen said, "As we ended fiscal year 2024, DocuSign delivered strong performance in product innovation, customer growth, and financial performance, including doubling our free cash flow year over year." The company emphasized that it has obtained StateRAMP authorization, allowing state, local, and education customers to use DocuSign products in StateRAMP-authorized environments, such as contract lifecycle management and eSignature. It is worth noting that about a month before announcing its financial results, DocuSign disclosed a plan to lay off approximately 6% of its workforce, as part of broader efforts to achieve its long-term growth goals as a publicly traded company. Additionally, there were reports in December last year that DocuSign had hired advisors to explore the possibility of a sale. When asked about the layoffs, Thygesen said in an interview, "We looked at the conditions required to execute our operational plan, and we just felt that we could be healthier without compromising our ability to achieve our mid to long-term growth aspirations. If you feel that way, I think you have to do it in the current environment." He also emphasized that the decision was not taken lightly.