DocuSign falls as much as 32% in pre-market trading after downbeat Q4 guidance

• E-signature company DocuSign dropped as much as 32.5% in premarket trading on Friday.
• The company gave downbeat fourth-quarter guidance, as it adjusts to more normal economic activity.
• DocuSign was a major beneficiary of the “work from home” pandemic economy, gaining 200% in 2020.

Electronic signature platform DocuSign fell as much as 32.5% in pre-market trade Friday, after the company reported earnings the previous day that beat expectations, but issued downbeat fourth-quarter guidance.

DocuSign was one of the “stay-at-home” darlings of 2020, rising 200% over the course of last year, as millions of office workers operated remotely and very little in-person business could take place with global lockdowns in effect. 

This year, as vaccinations rolled out to billions and more normal economic activity has resumed, DocuSign shares have gained around 5% in value — on a par with Amazon‘s.

So it’s fared a lot better than some of the other former stars of the pandemic, such as video-conferencing platform Zoom, which has fallen almost 44%; identity management company Okta, which has lost 13%; or home-exercise company Peloton, which has lost 70%.

In its fiscal third quarter earnings, DocuSign said it expects fourth-quarter revenue of $557-563 million, below analyst expectations for $573.8 million.

“While we had expected an eventual step-down from the peak levels of growth achieved during the height of the pandemic, the environment shifted more quickly than we anticipated,” CNBC quoted chief executive Dan Springer as having said on the company’s earnings call.

For the three months ended October 31, DocuSign reported a 42% year-on-year increase in total revenue of $545.5 million, marking six straight quarters of growth.

DocuSign shares were last down 32% at $157.75 in pre-market trading at 05:50 a.m. ET. They closed up 1.3% at $233.82 on Thursday.