I valued SpaceX for its IPO a few weeks ago, with minimal information and a promise to revisit the valuation, when the prospectus was made public. The prospectus is public, the offering price has been set and my update is up and running. https://t.co/zRjpD1C0wv
Wow, the S&P Dow Jones Indices has just officially announced that they will NOT be changing their inclusion rules to make it easier for โMegaCapโ companies (such as @SpaceX) to be fast-tracked into the S&P 500.
Their reasoning:
"S&P DJI determined that exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization. The decision not to adopt the proposed exceptions preserves core index principles by maintaining consistent application of these key requirements. Although there may be trade-offs between strict adherence to these eligibility requirements and broad representativeness, the current methodology provides substantial market coverage and sector balance. As a result, the indices can continue to meet their stated objectives while preserving their role as representative and investable benchmarks for the U.S. equity market.
No changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF, for the S&P 500, S&P MidCap 400, or S&P SmallCap 600 as a result of the S&P Dow Jones Indices consultation on the treatment of MegaCap companies. Accordingly, there will be no changes to existing methodology for this index family."
This means that the earliest @SpaceX could be eligible to be added to the S&P 500 would now be June 2027.
The requirements that will now remain in place are:
โขย No changes to S&P 500 eligibility rules for mega-cap companies.
โขย Mega-cap companies will still need to wait 12 months after their IPO before being considered for S&P 500 inclusion.
โขย S&P will not waive profitability requirements for mega-cap companies. The company must have positive GAAP net income in the most recent quarter, and the sum of the most recent four consecutive quarters.
โขย S&P will not waive minimum public float requirements for mega-cap companies. At least 10% of a company's shares must be publicly tradable ("free float").
The S&P rejected proposals that would have:
โข Reduced the IPO seasoning period from 12 months to 6 months
โข Waived profitability requirements
โข Waived minimum public float requirements
As with fat tails Llms are frequency machines that fail to extrapolate outside the sample set. What they know is the VISIBLE.
Almost as bad as economists, almost worse than psychologists.
Hoy presenta resultados $DOCU. Creo que puede ser una loterรญa, muy bien o muy mal. Tenรญa 1% de la cartera, con una ganancia de 20% en dรณlares. Vendรญ mi posiciรณn, ya que no tengo tanta convicciรณn en el papel.
$DOCU Q1 2027 earnings: IAM Migration Drives Cash Generation While Top-Line Growth Remains Stable
Docusign delivered a disciplined Q1 FY27, beating expectations with 9% YoY revenue growth to $830.2 million. The core narrative is firmly centered on the Intelligent Agreement Management (IAM) platform, which now accounts for 12.6% of total ARRโan acceleration from 10.8% last quarter. More importantly, the company is successfully extracting cash from this transition. Free Cash Flow surged 27% YoY to $289.4 million, funding aggressive shareholder returns ($317.5 million in stock repurchases). However, top-line growth has plateaued in the high single digits, and gross margins showed a slight deceleration, signaling that Docusign is currently driving profitability through operational cost controls rather than explosive core product expansion.
Full article with charts - link in bio
๐ ๐๐ฎ๐ฅ๐ฅ ๐๐๐ฌ๐
โข ๐๐๐ ๐๐ฅ๐๐ญ๐๐จ๐ซ๐ฆ ๐๐๐ข๐ง๐ข๐ง๐ ๐๐๐๐ง๐ข๐ง๐ ๐๐ฎ๐ฅ ๐๐ซ๐๐๐ญ๐ข๐จ๐ง โ IAM adoption is accelerating, representing 12.6% of total ARR (up from 10.8% sequentially), with 40,000 customers now on the platform. The upsell engine is working.
โข ๐๐๐ซ๐ ๐ข๐ง ๐๐ฑ๐ฉ๐๐ง๐ฌ๐ข๐จ๐ง & ๐๐๐ฌ๐ก ๐๐๐ง๐๐ซ๐๐ญ๐ข๐จ๐ง โ Non-GAAP operating margin expanded 250 basis points YoY to 32.0%. Management effectively funneled this operational leverage into Free Cash Flow, which funded a record $317.5M in share buybacks.
๐ป ๐๐๐๐ซ ๐๐๐ฌ๐
โข ๐๐๐ฏ๐๐ง๐ฎ๐ ๐๐ซ๐จ๐ฐ๐ญ๐ก ๐๐ญ๐ฎ๐๐ค ๐ข๐ง ๐๐ข๐ง๐ ๐ฅ๐ ๐๐ข๐ ๐ข๐ญ๐ฌ โ Despite the AI-powered IAM platform launch, total revenue growth remains stable at 9% YoY, and FY27 guidance implies this rate will not materially accelerate in the near term.
โข ๐๐ซ๐จ๐ฌ๐ฌ ๐๐๐ซ๐ ๐ข๐ง ๐๐จ๐ฆ๐ฉ๐ซ๐๐ฌ๐ฌ๐ข๐จ๐ง โ Non-GAAP gross margin compressed from 82.3% to 81.5% YoY. The impressive operating margin expansion is being achieved entirely through cuts in Sales & Marketing and R&D as a percentage of revenue, not gross profitability.
โ๏ธ ๐๐๐ซ๐๐ข๐๐ญ: ๐ข
Bullish. While the 'double-digit growth' aspiration remains elusive, the company is executing perfectly on what it can control: aggressively upselling IAM to the installed base, ruthlessly managing operating expenses, and returning massive amounts of cash to shareholders.
๐๐๐ฒ ๐๐ก๐๐ฆ๐๐ฌ
๐ข ๐๐๐ ๐๐ฅ๐๐ญ๐๐จ๐ซ๐ฆ ๐๐๐จ๐ฉ๐ญ๐ข๐จ๐ง ๐ข๐ฌ ๐๐๐๐๐ฅ๐๐ซ๐๐ญ๐ข๐ง๐ [NEW]
The migration of the legacy eSignature base to the higher-value Intelligent Agreement Management (IAM) platform is Docusign's primary growth driver. In Q1, IAM penetration reached 12.6% of total ARR (up from 10.8% in Q4 FY26), encompassing 40,000 customers. This demonstrates that the go-to-market overhaul executed last year is bearing fruit and successfully shifting the company from a point solution to an enterprise platform.
๐ข ๐๐๐จ๐ฌ๐ฒ๐ฌ๐ญ๐๐ฆ ๐๐ง๐ ๐ ๐ซ๐จ๐ง๐ญ๐ข๐๐ซ ๐๐ ๐๐ง๐ญ๐๐ ๐ซ๐๐ญ๐ข๐จ๐ง [NEW]
Management is embedding Docusign into the broader AI ecosystem rather than fighting it. The new 'Iris' AI engine and 'Docusign Agent Studio' allow teams to build custom workflows. Crucially, the introduction of the Model Context Protocol (MCP) server integrates Docusign directly with Anthropic Claude, Google Gemini, and OpenAI ChatGPT. This ensures Docusign remains the 'system of action' regardless of which LLM the enterprise adopts.
โช ๐๐ ๐ ๐ซ๐๐ฌ๐ฌ๐ข๐ฏ๐ ๐๐๐ฉ๐ข๐ญ๐๐ฅ ๐๐๐ญ๐ฎ๐ซ๐ง๐ฌ ๐๐ซ๐ข๐ฏ๐๐ง ๐๐ฒ ๐๐๐ฌ๐ก ๐๐๐๐ข๐๐ข๐๐ง๐๐ฒ
Free Cash Flow generation remains remarkably robust. Q1 FCF was $289.4M (a 35% margin). Management used this liquidity to execute $317.5M in stock repurchasesโa massive acceleration from $183.4M in the prior year period. The share count is steadily shrinking, creating an underlying tailwind for EPS even if top-line growth remains moderate.
๐ด ๐๐ซ๐จ๐ฌ๐ฌ ๐๐๐ซ๐ ๐ข๐ง ๐ข๐ฌ ๐๐๐๐๐ฅ๐๐ซ๐๐ญ๐ข๐ง๐ [NEW]
A concerning divergence appeared in the Q1 income statement: Non-GAAP gross margin fell to 81.5% from 82.3% YoY. The 250 bps expansion in operating margin was achieved entirely by reducing Sales & Marketing (31.8% to 29.8% of revenue) and R&D (13.1% to 12.2% of revenue). Shrinking R&D spend while attempting to win an AI arms race contradicts the narrative of aggressive platform innovation.
๐ด ๐๐ญ๐จ๐๐ค-๐๐๐ฌ๐๐ ๐๐จ๐ฆ๐ฉ๐๐ง๐ฌ๐๐ญ๐ข๐จ๐ง ๐๐๐ฆ๐๐ข๐ง๐ฌ ๐ ๐๐๐๐ฏ๐ฒ ๐๐ง๐๐ก๐จ๐ซ
While Non-GAAP metrics look stellar, Stock-Based Compensation (SBC) remains high at $141.3 million for the quarter. Although it decreased slightly from $145.5 million a year ago, it still consumes roughly 17% of total revenue. True GAAP operating margin, inclusive of these costs, is only 13.4%.
โช ๐๐ก๐ข๐๐ญ ๐ญ๐จ ๐๐๐ ๐๐๐ญ๐ซ๐ข๐ ๐๐๐ฌ๐ค๐ฌ ๐๐ก๐จ๐ซ๐ญ-๐๐๐ซ๐ฆ ๐๐จ๐ฅ๐๐ญ๐ข๐ฅ๐ข๐ญ๐ฒ
As promised in late FY26, Docusign has officially eliminated the 'Billings' metric from its guidance, pivoting to Annual Recurring Revenue (ARR). While this smooths out the severe quarterly volatility caused by early renewals, it also removes a key leading indicator that investors previously used to gauge immediate short-term demand.
๐๐ญ๐ก๐๐ซ ๐๐๐๐ฌ
๐๐จ๐ง-๐๐๐๐ ๐๐ฉ๐๐ซ๐๐ญ๐ข๐ง๐ ๐๐๐ซ๐ ๐ข๐ง: 32.0%
Accelerating. Up from 29.5% a year ago. Docusign continues to wring impressive operational efficiencies out of its business, significantly beating its prior full-year targets of ~30%. Management raised the FY27 guidance to 30.5%-31.0%, indicating confidence that these structural cost reductions are permanent.
๐ ๐ซ๐๐ ๐๐๐ฌ๐ก ๐ ๐ฅ๐จ๐ฐ: $289.4 million
Accelerating. Up 27% YoY from $227.8M in Q1 FY26. Free Cash Flow margin expanded to 35% of revenue. This exceptional cash conversion is the primary engine funding the company's multi-billion dollar buyback program.
๐๐ฎ๐ข๐๐๐ง๐๐
๐๐ ๐ ๐๐๐ ๐๐๐ฏ๐๐ง๐ฎ๐: $865 to $869 million
Stable. The midpoint of $867 million implies an ~8% YoY growth rate. Adjusting for a projected 1.4% FX headwind, underlying constant currency growth remains pinned in the high single digits, failing to break out into the promised double-digit acceleration.
๐ ๐๐๐ ๐๐จ๐ญ๐๐ฅ ๐๐๐ฏ๐๐ง๐ฎ๐: $3.490 to $3.502 billion
Stable. The midpoint ($3.496B) implies roughly 9% growth YoY. Docusign remains a steady compounder, but the numbers suggest the IAM transition is protecting and modestly expanding the base rather than serving as a massive new growth vector.
๐ ๐๐๐ ๐๐ง๐ง๐ฎ๐๐ฅ ๐๐๐๐ฎ๐ซ๐ซ๐ข๐ง๐ ๐๐๐ฏ๐๐ง๐ฎ๐ (๐๐๐) ๐๐ซ๐จ๐ฐ๐ญ๐ก: 8.25% to 8.75%
Stable. Reaffirming the target set at the end of FY26. This metric is now the official compass for Docusign's top-line health. Achieving the high end of this range depends entirely on migrating enterprise customers to the IAM platform.
๐ ๐๐๐ ๐๐จ๐ง-๐๐๐๐ ๐๐ฉ๐๐ซ๐๐ญ๐ข๐ง๐ ๐๐๐ซ๐ ๐ข๐ง: 30.5% to 31.0%
Accelerating. Raised from the initial FY27 forecast of 30.0% to 30.5% given in the Q4 call. Docusign is structurally more profitable today than it was 12 months ago.
๐๐๐ฒ ๐๐ฎ๐๐ฌ๐ญ๐ข๐จ๐ง๐ฌ
๐๐ซ๐จ๐ฌ๐ฌ ๐๐๐ซ๐ ๐ข๐ง ๐ฏ๐ฌ ๐๐ฉ๐๐ซ๐๐ญ๐ข๐ง๐ ๐๐๐ซ๐ ๐ข๐ง ๐๐ข๐ฏ๐๐ซ๐ ๐๐ง๐๐
Non-GAAP gross margins compressed by 80 basis points YoY, yet operating margins hit 32%. Are we reaching the limits of S&M and R&D efficiency, and what is driving the core cost of revenue higher? Is it AI computing costs?
๐๐๐๐ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ ๐๐จ๐ฅ๐ฅ๐จ๐ฎ๐ญ
IAM jumped from 10.8% to 12.6% of total ARR in one quarter. What proportion of this was driven by price uplift during renewals versus entirely net-new departmental use cases (like HR and Sales)?
๐&๐ ๐๐ฉ๐๐ง๐ ๐ข๐ง ๐๐ง ๐๐ ๐๐ซ๐ฆ๐ฌ ๐๐๐๐
Non-GAAP R&D fell to 12.2% of revenue from 13.1% YoY. How is Docusign funding the 'fastest pace of innovation in history' while simultaneously cutting R&D margins?
For Aristotle, the banausos is not just physically deformed by his profession, but politically and ethically stunted: specialization makes him less a complete man than a TOOL of his occupation.
Politics, book VII:
"And any occupation, art, or science, which makes the body or soul or mind of the freeman less fit for the practice or exercise of virtue, is vulgar; wherefore we call those arts vulgar which tend to DEFORM the body, and likewise all paid employments, for they absorb and degrade the mind."
Me cuesta entender a los que siguen pagando Marvell, $MRVL a estos precios. Es sorprendente ademรกs la influencia que tiene Huang, CEO de $NVDA, sobre las cotizaciones en este momento.
@DiegoLemansky Yo pienso lo mismo. Estรก quemando dinero tratando de hacer daรฑo. Si realmente quisiera salir de la mejor forma posible, este es el peor camino.
Many obsessed only with the model. The models are the foundation, but real impact in business comes from deployment.
Deployment means knowing the technology ecosystem and maturing new solutions through real, iterative work. AI accelerates that loop โ but the final understanding and adaptation to reality need human intervention. A person still provides the intention.
This is exactly what we have been seeing on the ground. Humans plus AI is the winning formula.
@Juancamolinari "Estรก bajando" asume cierto conocimiento del futuro. Es extrapolar el pasado. Lo que "estรก bajando" puede dejar de hacerlo, nadie sabe cuรกndo.
Yo no miro en tรฉrminos de si estรกn bajando o subiendo, sino en tรฉrminos de si estรกn subvaluados o no, y con quรฉ margen de seguridad.
I have a great idea. I am going to spend a trillion dollars so I can make $10 billion a year in profit, if all goes well.
Thatโs a 1% annual return โ IF it works out.
Whoโs in?
Donโt worry about the risk that it might not work out!