Key Takeaways
- DocuSign and Unity Software are undergoing strategic resets aimed at improving margins and focusing on core strengths.
- DocuSign is leveraging AI and sticky enterprise workflows to enhance its contract management offerings, with pricing bundling seen as a potential growth lever.
- Unity Software is refocusing on its real-time 3D engine while shifting pricing models and cutting costs to stabilise operations.
- Both firms have posted financial results that reflect early signs of operational improvement, despite broader market headwinds.
- Investor sentiment remains cautiously optimistic, with ‘Buy’ ratings supported by potential pricing upside and cost discipline.
In the ever-evolving landscape of software-as-a-service and digital tools, turnaround stories often hinge on a delicate balance of cost discipline, strategic pricing adjustments, and a renewed focus on core strengths. Companies like DocuSign and Unity Software exemplify this dynamic, where operational resets and margin enhancements are driving renewed investor interest amid broader market volatility. As of 16 August 2025, these firms are navigating post-pandemic growth challenges by optimising free cash flow generation, expanding product suites, and right-sizing expenses—moves that could unlock significant value if execution remains sharp.
DocuSign: Leveraging Sticky Workflows for Margin Expansion
DocuSign, a leader in electronic signature and agreement management, has demonstrated resilience through its free cash flow-rich model, bolstered by inherently sticky workflows that embed the platform deeply into enterprise operations. The company’s contract lifecycle management (CLM) offerings, which streamline everything from negotiation to archiving, present ample room for expansion, particularly as businesses seek integrated solutions for identity verification and compliance. Recent financial prints reveal the fruits of margin-focused initiatives, with analysts noting improved profitability metrics that underscore the potential for sustained growth.
According to data from DocuSign’s third-quarter fiscal 2025 results, released in December 2024, the firm highlighted new AI-driven capabilities aimed at uncovering insights and eliminating inefficiencies in agreement processes. This aligns with broader industry trends where software providers are bundling advanced features to justify premium pricing. For instance, opportunities to refine pricing bundles—such as tiered subscriptions that incorporate CLM and identity management—could enhance revenue per user without alienating the core customer base. Market sentiment, as captured by analyst ratings averaging a 2.5 ‘Buy’ on a scale where lower numbers indicate stronger conviction, reflects optimism around these levers.
From a valuation standpoint, DocuSign’s shares closed at $70.90 on 16 August 2025, marking a 2.75% daily gain amid a 52-week range of $54.31 to $107.86. The forward price-to-earnings ratio stands at 19.21, based on expected earnings per share of $3.69, suggesting the market is pricing in moderate growth. Historical context shows the company has weathered a 14.52% decline over the past 200 days from an average of $82.95, yet its book value of $9.97 and price-to-book of 7.11 indicate a solid balance sheet. Analysts project earnings for the current year at $3.58 per share, with the next report due on 4 September 2025, potentially serving as a catalyst if margin work continues to manifest in the numbers.
Strategic Pricing and Expansion Opportunities
One key avenue for DocuSign’s turnaround lies in pricing optimisation. By expanding into adjacent areas like identity verification (ID), the company can create bundled offerings that address the full spectrum of contract needs, potentially increasing average revenue per user. This strategy echoes successful turnarounds in the SaaS space, where firms like Adobe transitioned from perpetual licences to subscription models, boosting recurring revenue. KPMG’s insights on turnaround strategies, published in March 2025, emphasise proactive restructuring to drive growth, such as targeting inefficiencies in pricing and product bundling before financial distress escalates.
- Free cash flow richness provides a buffer for investments in CLM expansion.
- Sticky workflows ensure high retention rates, with churn historically low in enterprise segments.
- Margin improvements are evident in recent quarters, with AI integrations poised to further streamline operations.
Forecasts from analyst models suggest that if DocuSign achieves a 10–15% uplift in pricing through bundling, revenue could grow by mid-teens percentages annually through 2027, assuming stable macroeconomic conditions.
Unity Software: Resetting for Core Gaming and Real-Time 3D
Unity Software, the engine behind a vast array of interactive experiences, is undergoing a hard reset under new leadership, refocusing on its core gaming engine while aggressively right-sizing its cost base. This pivot away from peripheral ventures towards real-time 3D technology positions the company as an out-of-the-money call option on the burgeoning demand for immersive content creation tools. Execution will be critical, but early signs from 2025 financials indicate a stabilising trajectory.
In its second-quarter 2025 earnings, reported on 6 August 2025, Unity posted revenue of $440.9 million, a 1.9% year-over-year decline, yet it beat expectations with an adjusted EBITDA margin of 21%. The company narrowed its net loss to $108.8 million and provided third-quarter guidance of $440–450 million, signalling a slow but shaping turnaround. This follows a portfolio reset that exited non-core businesses, as detailed in Motley Fool analysis from February 2025, which noted a 25% revenue plunge in Q4 2024 due to strategic simplifications but highlighted advertising reboots as a growth driver.
Shares of Unity closed at $38.01 on 16 August 2025, down 1.07% for the day, within a 52-week range of $15.33 to $38.99. The stock has surged 58.07% over the past 200 days from an average of $24.05, reflecting market enthusiasm for the reset. With a market cap exceeding $16 billion and shares outstanding at 422.5 million, Unity’s forward P/E is negative at -36.55 due to anticipated losses, but current-year EPS is projected at $0.80. Analyst sentiment averages a 2.2 ‘Buy’ rating, with the next earnings on 6 August 2025 already in the rearview, setting the stage for further updates.
Cost Optimisation and Real-Time 3D Potential
Unity’s strategy involves a return to subscription-based models with price increases, as announced in September 2024, shifting from controversial runtime fees to seat-based pricing for Pro and Enterprise tiers starting January 2025. This, combined with cost base adjustments, has improved financial discipline. Simply Wall St reports from July 2025 underscore Unity’s past performance, noting revenue declines but potential in advertising technology. The company’s SWOT analysis by Investing.com, dated two days prior to 16 August 2025, highlights strengths in its vector ad platform and a current ratio of 2.73, indicating short-term stability.
| Metric | DocuSign (DOCU) | Unity Software (U) |
|---|---|---|
| Closing Price (16 Aug 2025) | $70.90 | $38.01 |
| Market Cap | $14.33B | $16.06B |
| Forward P/E | 19.21 | -36.55 |
| Analyst Rating | 2.5 (Buy) | 2.2 (Buy) |
| Next Earnings Date | 4 Sep 2025 | 6 Aug 2025 (Reported) |
Analyst-led forecasts indicate Unity could return to profitability by 2026 if real-time 3D adoption accelerates, driven by AI integrations that redefine game development. Posts on X from industry observers in early 2025 echoed sentiment around Unity’s subscription shift, viewing it as a positive step away from revenue-sharing pitfalls.
Broader Implications for Software Turnarounds
The paths of DocuSign and Unity illustrate a blueprint for software turnarounds: refocus on core competencies, optimise costs, and innovate pricing to capture untapped value. While DocuSign benefits from enterprise stickiness, Unity’s bet on real-time 3D could yield asymmetric upside. Investors should monitor execution risks, such as competitive pressures in gaming engines or macroeconomic headwinds affecting SaaS adoption. As of 16 August 2025, both stocks carry ‘Buy’ ratings, suggesting the market sees potential in these strategies, though volatility remains a factor.
In a sector where dry humour might note that turnarounds often turn around again, the data points to measured progress. With margin work translating to prints and strategic resets underway, these firms could reward patient capital.
References
- https://www.docusign.com/company/news-center/docusign-announces-third-quarter-fiscal-2025-financial-results
- https://www.fool.com/investing/2025/02/21/unitys-turnaround-is-slowly-taking-shape/
- https://kpmg.com/us/en/articles/2025/turnaround-strategies-to-improve-business-performance.html
- https://simplywall.st/stocks/us/software/nyse-u/unity-software
- https://finance.yahoo.com/quote/U/news/
- https://investing.com/news/swot-analysis/unity-softwares-swot-analysis-vector-ad-platform-boosts-stock-outlook-93CH-4194252
- https://simplywall.st/stocks/us/software/nyse-u/unity-software/news/unity-software-u-trims-losses-and-lowers-impairmentsis-its-t
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