DocuSign: Keep your business deals going
The COVID-19 pandemic is one of the most severe economic shocks and disruptions in history. There clearly will be longer-lasting implications for almost all sectors and types of economies such as restaurants, airlines, hotels, brick-and-mortar retail. However, there are several industries and businesses that achieved record revenues and even appeared on the map of 2020.
DocuSign is one of the most straightforward beneficiaries of the coronavirus pandemic. The pandemic has put companies like Zoom, Slack, DocuSign on the map of winners. The stock has more than tripled so far this year, but some of those gains were a much-deserved catch-up as DocuSign’s offerings had been growing for years. Enterprise software and technology vendors are the ones that enable businesses to effectively get work done with remote teams in a distributed environment. As companies continue to shift from paper-based to digital processes, DocuSign performance metrics highlighting significant demand for digital document workflow and e-signature capabilities.
The pandemic certainly made the demand for DocuSign’s services even higher than ever before. The company has posted a revenue increase of 53% year-over-year to $382.9 million during 2020. The subscription revenue increased 54% year-over-year to $366.6 million. In addition to that, DocuSign added 73,000 new customers during the quarter, of which approximately 14,000 were direct customers. The company’s install base to nearly 822,000 customers worldwide, of that total, around 113,000 are enterprise and commercial customers. Billings, which is another key indicator for SaaS services as it reflects the robustness of the revenue pipeline, were expected to be around $520 million. [1].
Figure 1 – SEC Filings. Fiscal Quarters Shown, [1].
Let us think and have a look at what keeps DocuSign stocks to buy. The question is how likely it will be the new norm for business after everyone is back in the office. Some companies that have benefited from isolation may not sustain gains we are back to normal business. In the case of DocuSign, it turns out enterprise and commercial customers have experienced and loved the benefits of digital transformations. Would it be the new normal for most businesses and consumers?
Customers share their experiences. Laura Schultz, Company Secretary Operations Coordinator at leading biotech company CSL Ltd, shares they were able to recognize the value of DocuSign for eSignatures. It has helped her save considerable time and effort by streamlining signature processes. Laura would definitely continue using new features in organizing the working process: “When the pandemic hit and most of us switched to working from home full-time, it really came into its own, enabling me to get documents signed remotely without delay. I can foresee that DocuSign will be even more valuable when it comes to occasions when I have multiple documents to be signed, for example, annual statements. Using it consistently, even when we’re all back in the office, will also help to standardize our processes, boosting efficiency” [2].
The software has also several other improvements and features that are recognizable and appealing to organizations and consumers such as improved security and version control. Security measures ensure that only relevant people access the documents and signatures. If the document changes after adding a signature, the signature becomes invalidated so there is no way changes can be made without proper authorization. To sum up, the DocuSign signatures are nationally recognized, ensures authentication, can be safely stored in business networks, available for reporting & compliance audit purposes in real-time, and, which is even more important, it allows doing business deals and remote workflows online even after the disruption subsides [3].
Dan Springer, CEO of DocuSign, also believes it is not a short-term trend. He said: “Overall, the response to COVID-19 has caused organizations to accelerate their digital transformation efforts by two, three, four years or more. They’ve seen remote work can be even more productive and the digital agreement processes are fast becoming business as usual. We are not waiting for the future though, as we continue to innovate across the entire Agreement Cloud suite” [4]. Agreement Cloud Suite is a complete suite of products and integrations for digitally transforming how organizations prepare, sign, act on, and manage agreements. The objective of DocuSign is to connect the entire agreement process from end to end, allowing deals to be done faster with less risk, lower costs, and better experiences.
In a highly uncertain environment, the service providers and customers managed to significantly accelerate digital projects in order to operate effectively and efficiently. DocuSign has a great opportunity to continue increasing its installment base and delivering value for the buyers.
References
[1] BoomTech. 2021. 5 Benefits of Using DocuSign During COVID-19 Crisis – BoomTech. [online] Available at: <https://www.boomtechit.com/5-benefits-of-using-docusign-during-covid-19-crisis/> [Accessed 10 February 2021].
[2] diginomica. 2021. DocuSign Q3 revenues up 53% as e-signature takes hold during COVID-19. [online] Available at: <https://diginomica.com/docusign-q3-revenues-53-e-signature-takes-hold-during-covid-19> [Accessed 10 February 2021].
[3] Diligent Insights. 2021. How Using DocuSign During the COVID-19 Pandemic Has Helped One Early Adopter Realize the Benefits | Diligent Insights. [online] Available at: <https://insights.diligent.com/entity-governance/how-using-docusign-during-the-covid-19-pandemic-has-helped-one-early-adopter-realize-the-benefits> [Accessed 10 February 2021].
[4] Evan Niu, C., 2021. DocuSign Results Dispel Fears Around Billings | The Motley Fool. [online] The Motley Fool. Available at: <https://www.fool.com/investing/2020/12/05/docusign-results-dispel-fears-around-billings/> [Accessed 10 February 2021].
DocuSign undoubtedly solved one of the greatest problems of the pandemic by providing official digital signatures for users. But what is more valuable to bad actors than access to signatures of more than 500,000 customers and hundreds of millions of users in over 180 countries? Arguably nothing. So it goes, DocuSign was hacked in 2020. The company claims that signatures remain secure and untouched.
74% of consumers say they have no control over the personal information that is collected on them, according to the 2020 report “Privacy and Security in a Digital World: A Study of Consumers in the United States.” Through that, consumers may feel unaffected by or even indifferent to these data breaches, so DocuSign will probably continue to grow as expected. But personally, I will be steering clear of uploading my signature to an insecure system, and I will stick with this: “Electronically signed: Cristina Gallotto.”
Very valid point, Cristina, thank you. Data privacy and security is definitely is the key aspect they will need to think about. While the customer base is growing, it will be an even more attractive target for phishing and hacking attempts.
Interesting case! The pandemic definitely pushed companies to overcome their fear of having signatures done in a digital format. I agree that most companies will continue using the product with the all reasons you mentioned.
As Christina is saying, one biggest risk DicuSign is facing is definitely the security of its system. What happens if someone hacks a senior executive’s account and upload signature, and as the result the company pursues with a plan which wouldn’t have proceeded without the digital signature? Who will be responsible for that? Once this kind of incidence happens (even once!), I guess the trust will quickly disappear.
Given the ongoing mutations of COVI19, health experts have been speculating that the virus will become endemic. Thus, contactless document signing will also provide a safe way to securely agree to terms and sign documents. This safety will be driven from both its digital security, but from the physical security the product enables. I am long term bullish on this product.
I have personally used Docusign on numerous occasions over the past few years and can attest to the product quality. It’s user interface is intuitive and makes document signing VERY easy. However, it also becomes VERY easy to just sign and initial a contract without actually reading it, which is something many people (including myself) do (when was the last time you read the user agreement before an iPhone update?). I believe the frictionless nature of the product makes businesses and transaction more efficient, but there may be some customer protection features that need to be put in place to ensure informed consent when signing. Furthermore, precatory actors may use Docusign to scam people, again, due to the quick sign/initial features.
DocuSign is a clear case of riding the wave of accelerated trends of digitization that came with the covid-19 pandemic. Even if people still distrusted such a system, many were forced to use it out of necessity.
The high dependence on PC to use the application has left out a key portion of the market, with many companies operating mainly over their phones. This untapped market has started to be addressed in Brazil for instance, with rising players such as zapsign.com.br starting to own the e-signature experience on mobile channels such as WhatsApp.
Thanks for your perspective, Almas, indeed DocuSign is providing a high quality product and is one of the winners of the pandemic!
However, as already mentioned by Cristina, Kamako and Omar, there are very relevant implication for both the security of the signatures as well as the (current) lack of measurements to ensure an informed consensus!
I’d be curious to see whether DocuSign will implement features to ensure trust of users and customer protection/informed consensus regulations.