Docusign Earnings: Positive Indications Continue in Results, Metrics, and With IAM

We are raising our fair value estimate for no-moat Docusign to $70, from $65, after the company reported good second-quarter results, with both revenue and non-GAAP operating margin topping our expectations as well as the high end of guidance. The company has been delivering strong quarterly results over the last year or two. Early indications on the recently launched Intelligent Agreement Management, or IAM, platform are that deal sizes are larger, win rates are better, and deals are closing faster, and August bookings were larger than June and July combined. So all signals are pointing in the right direction. The primary negative element from results is that billings guidance is the disconnect within guidance that has billings growing at half the rate revenue is for the full year. We see solid results, stabilization trends, slightly raised guidance for the year, several green shoots, and $200 million in share buybacks for the quarter as evidence that the company is on a better trajectory even if we currently prefer some of our wide-moat stocks.