Shares of DocuSign Head Higher as It Gets Ready to Join Nasdaq 100 Index

DocuSign shares were rising on Monday and hit a new high after Nasdaq announced this past Friday that the electronic signature software company would replace United Airlines on the Nasdaq 100 index.

The company is joining cloud companies such as Workday and Zoom on the index.

Shares were up as much as 8.7% on the news on Monday and hit a new all-time high as well as posting its biggest increase since May 29th.

DocuSign had debuted on the Nasdaq in 2018. The company’s quarterly results beat analysts’ estimates for the quarter that ended on April 30 as it projected $1.32 billion in revenue for its full fiscal year, which ends in January 2021, implying 35% growth. DocuSign remains unprofitable.

The company expects over $1 billion in revenue in the current fiscal year.

“Even when the Covid-19 situation is behind us, we don’t anticipate customers returning to paper or manual-based processes,” CEO Dan Springer told analysts on a conference call.

Springer also said on the earnings call, “Our billings grew 59% year-over-year to $342 million and revenue grew 39% to $297 million. This strong growth was driven by used case expansion across a broad cross section of our installed base, as well as adoption by new customers. We added more than 10,000 net new direct customers and almost 58,000 self-service customers, bringing our global total of paying customers to nearly 661,000. And our operating margins and cash flow remains strong even as we made key investments to address this heightened demand.”

“Much of the strong Q1 performance was driven by increased demand for eSignature from organizations that suddenly needed a way to sign and manage agreements from wherever they were. Typically, eSignature is the first step that many customers take on their broader digital transformation journey with us. So from a financial point of view, we believe this surge in eSignature adoption bodes well for future Agreement Cloud expansion,” he added.

DocuSign will become a component of the index on June 22nd.

Disclaimer: We have no position in Docusign Inc. (NASDAQ: DOCU) and have not been compensated for this article.