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DocuSign CEO Daniel Springer. (DocuSign Photo).

DocuSign stock is in free-fall despite the e-signature giant posting rapid revenue growth last quarter and reaching a customer milestone.

Revenue: DocuSign reported $214 million in revenue in the first quarter of its fiscal year, an increase of 37 percent over the prior year. That is well ahead of analyst expectations of $208.15 million in revenue.

Profits: Net income of $13.5 million for the quarter, or $0.07 per share, came in ahead of analyst expectations of $0.04 per share.

Customers: DocuSign finished the quarter with 508,000 paying customers, up roughly 27 percent over a year ago, when the company hit 400,000 customers.

Reaction: DocuSign stock is down more than 17 percent in after-hours trading.

“Overall, we posted a solid first quarter for Fiscal 2020—revenues grew 37 percent year-over-year, we were again profitable on a non-GAAP basis, and we now have over half a million paying customers around the world,” CEO Dan Springer said in a statement. “What’s more, we are seeing strong results from the work we’ve done to optimize our go-to-market sales motion, bringing in net new customers and expanding use cases within our installed base. And with the announcement of the DocuSign Agreement Cloud this quarter—our suite of products and integrations for automating the entire agreement process—we can now deliver a much broader set of solutions to market, positioning us as the next ‘must-have’ cloud.”

DocuSign garnered Deal of the Year honors at the 2019 GeekWire awards for its $465 million IPO. The company’s stock had risen 38 percent through the end of trading Thursday.

DocuSign is known most for its e-signature product, where it is competing with Adobe and others. In March, the company unveiled new tools that are part of an ongoing evolution to owning what DocuSign calls the “agreement cloud,” which includes not only signing documents but creating and managing them.

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