The shares of the electronic signature firm DocuSign declined by 12% last Friday although they had reported earnings which were better than expected. The main problems faced by the firm are in drawing extra revenue from the customers.
Firms like Box, Cloudera, Pivotal Software and Zuora have been facing difficulty with long sales cycles and also problems with sales execution and had been punished by Wall Street, some to a great extent while the others to a lesser extent. DocuSign had purchased SpringCM for $220 million last year and after that their issues popped up. This made the firm to enter into a CLM (Contract Lifecycle Management) wherein the documents were created for the people to be signed and then the changes were tracked. Dan Springer, CEO of DocuSign told in an interview that sales had become harder for them after having become a two-product firm. He said that the sales cycle will be elongated, the short-term billings will be reduced and the long-term billings will be increased as there are more to sell.
There was an 89% increase in the stock price of DocuSign last week. This cloud-based software firm had gone public only in the recent years and had provided great growth opportunities for technology investors. DocuSign’s drop on Friday was their worst drop so far in history. Liz Verity and Rob Owens, analysts at Key Banc capital Markets said that this was the first ever slip they had seen although it was a small one.
There was 41% drop in the shares of Pivotal. The firm said that they had faced issues in sales execution. Rob Mee, the CEO of Pivotal told that some deals which they had expected to do in Q1 had slipped.
The shares of Cloudera had dropped by 43%. Tom Reilly, their CEO had gone recently and they had to face great competition from other cloud providers after they merged with Hortonworks.
Zuora’s shares fell by 30% and they also reported having issues with sales execution. A 4.2% drop was suffered by Box also. Aaron Levie, CEO of the firm said that the reason for the present trend is because of the longer sales cycle as compared to that few years back.