Investors dumped on DocuSign Inc. today after it offered guidance for the final quarter of the year that fell short of expectations.

A sharp selloff in extended trading saw its stock lose almost 30% of its value. Update: On Friday, shares were falling more than 39%.

The company actually did well in the quarter just gone. It reported third-quarter earnings before certain costs such as stock compensation of 58 cents per share on revenue of $545 million, up 42% from a year ago. That easily beat Wall Street’s targets of a 46-cent-per-share profit and $533 million in sales.

DocuSign Chief Executive Dan Springer (pictured) said the company also delivered an operating margin of 22%, exceeding expectations. However, he said that after six straight quarters of pandemic-accelerated growth, customers began to return to more normalized buying patterns, leading to billings growth of just 28% year-over-year.

“With a $50 billion total addressable market and 1.11 million customers worldwide, we are confident in the value DocuSign delivers in an increasingly digital anywhere economy,” Springer said.

DocuSign sells tools that make it possible to sign documents electronically without meeting anyone face-to-face. It’s a capability that has proved useful for businesses during the COVID-19 pandemic.

Although DocuSign beat expectations by some distance, with revenue growing by 40%-plus for the sixth successive quarter, investors are apparently much more concerned about what lies ahead for the company as the disruption brought about by the pandemic subsides.

Unfortunately for DocuSign, the days of rapid growth look set to end. The company admitted as much when it offered its fourth-quarter guidance. It forecast revenue of between $557 million and $563 million. That was some way below Wall Street’s projection of $573.8 million in fourth-quarter sales.

Springer told investors on a conference call that the company’s guidance suggests revenue growth of around 30%. Although that’s certainly not bad by any stretch, Springer admitted some might be disappointed after the company saw “exceptionally high growth rates at scale” at the height of the pandemic.

“While we had expected an eventual step down from those peak levels of growth, the environment shifted more quickly than we anticipated,” Springer said.

Photo: DocuSign/Facebook