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DocuSign (DOCU), a pioneer of e-signature technology, has fallen on hard times recently as in-person meetings resume and as competition intensifies, but the stock is soaring today following a much better-than-expected quarterly report. In need of a shake-up, DOCU replaced former CEO Dan Springer with Allan Thysgesen, a Google (GOOG) veteran, this past October. With the company cruising past muted Q3 EPS and revenue expectations and delivering billings of $659.4 mln, crushing its guidance of $584-$594 mln, it's safe to say that Thysgesen is off to a solid start.

When Thysgesen took the helm of DOCU a couple of months ago, he identified a few key missteps that have weighed on the company's financial performance.

• For instance, during last night's earnings call, he noted that the company didn't scale the workforce properly after it experienced such strong growth during the pandemic. Consequently, DOCU's innovation capabilities took a hit, enabling competitors to grab market share.
• The company's go-to-market strategy was lacking and became increasingly inefficient as it struggled with high employee turnover within its sales team. 
• When the market began to turn due to changing macroeconomic conditions, DOCU was slow to adjust, and it was unable to fully address the softening landscape because it didn't have the proper operations in place.

Although these issues haven't been completely remedied in Thysgesen's short stint as CEO, the company has taken some important steps that are already paying dividends. One significant development is that attrition within sales continued to moderate and DOCU is seeing more stabilization in the field. Additionally, the company is focusing on making the customer experience more seamless, primarily by building out its self-service capabilities. While at GOOG, Thysgesen was deeply involved in building out the self-service platform for the advertising business. With 1 million self-serve customers already under DOCU's belt, he has a running start for this initiative.

As encouraging as DOCU's upside earnings report was, it certainly wasn't without some blemishes.

• Dollar net retention rate slipped to 108% from 110% last quarter and DOCU expects this metric to continue trending lower for the remainder of the year. Muted buying patterns and slower expansion rates are to blame for the decline.
• While billings growth of 17% easily beat expectations in Q3, DOCU is anticipating a pullback in growth next quarter and beyond. For Q4, the company is forecasting billings of $705-$715 mln, equating to growth of 5-7%, while FY24 billings growth is expected to be in the low single-digits.
• Relatedly, DOCU acknowledged during the earnings call that macro conditions have become more challenging and that it's seeing smaller deal sizes as customers scrutinize their spending budgets. Two verticals in particular where DOCU is experiencing weakness are real estate and financial services.

The main takeaway is that business is stabilizing for DOCU and the company seems to be back on the right track with Thysgesen leading the way. The company is not out of the woods just yet, though, as it tries to separate itself from an increasingly crowded field in the face of difficult macroeconomic conditions.