SAN
FRANCISCO, Dec. 7, 2023 /PRNewswire/ -- DocuSign,
Inc. (NASDAQ: DOCU), which offers the world's #1 e-signature
product as part of its industry leading lineup, today announced
results for its fiscal quarter ended October 31, 2023.
"DocuSign had a solid third quarter, delivering record non-GAAP
operating margin and free cash flow," said Allan Thygesen, CEO of DocuSign. "We are making
progress on product innovation, go-to-market effectiveness, and
operational efficiency as we build on our considerable scale and
trusted market position and expand beyond e-signature into
intelligent agreement management."
Third Quarter Financial Highlights
- Total revenue was $700.4
million, an increase of 9% year-over-year. Subscription
revenue was $682.4 million, an
increase of 9% year-over-year. Professional services and other
revenue was $18.1 million, a decrease
of 16% year-over-year.
- Billings were $691.8
million, an increase of 5% year-over-year.
- GAAP gross margin was 80% for both periods. Non-GAAP
gross margin was 83% for both periods.
- GAAP net income per basic share was $0.19 on 204 million shares outstanding compared
to a loss of $0.15 on 201 million
shares outstanding in the same period last year.
- GAAP net income per diluted share was $0.19 on 208 million shares outstanding compared
to a loss of $0.15 on 201 million
shares outstanding in the same period last year.
- Non-GAAP net income per diluted share was $0.79 on 208 million shares outstanding compared
to $0.57 on 206 million shares
outstanding in the same period last year.
- Net cash provided by operating activities was
$264.2 million compared to
$52.5 million in the same period last
year.
- Free cash flow was $240.3
million compared to $36.1
million in the same period last year.
- Cash, cash equivalents, restricted cash and
investments were $1.7 billion at
the end of the quarter.
A reconciliation of GAAP to non-GAAP financial
measures has been provided in the tables included in this press
release. An explanation of these measures is also included below
under the heading "Non-GAAP Financial Measures and Other
Key Metrics."
Operational and Other Financial Highlights:
- 2023 Gartner Magic
Quadrant Leader: For the fourth year in a row, DocuSign was
named a Leader in the 2023 Magic Quadrant for Contract Life Cycle
Manager report by Gartner, Inc. This year, among the 16 vendors
evaluated, DocuSign was one of only five leaders and placed highest
on the "ability to execute" axis.
- DocuSign India: DocuSign announced the opening of our
engineering center of excellence in India. With the office opening, we'll be able
to recruit top talent and accelerate our ability to deliver
critical data-focused product innovation while increasing our
global presence.
- DocuSign 2023 Releases: DocuSign announced new
product capabilities for generating agreements, creating better
signing experiences and managing end-to-end agreements. Highlights
of our recent product release include:
- DocuSign eSignature and Microsoft Power Pages
Integration: Easily integrates DocuSign eSignature into
Microsoft's DIY website builder, Power Pages. This integration
allows Power Pages makers to give customers a secure way to
digitally sign documents without leaving their website—even forms
that require multiple steps. Teams in any industry can use this
functionality to simplify workflows for common documents that need
to be signed (e.g. consent forms, medical agreements, benefits
forms, license applications, etc.).
- Seamlessly Embedded Agreements: An enhancement to
Embedded Signing enables users to easily configure the display
format so that agreements can seamlessly match the look and feel of
websites or applications. Users can also configure different
signing methods, including click-to-sign, to eliminate friction
points and optimize conversion rates to eliminate potential
abandonment of agreements.
- Agreement Reminders: CLM Essentials customers can now
manage their contracts more efficiently. By scheduling custom email
agreement reminders, users can avoid missing important contract
milestones, like contract expiration, renewal, or follow-up
deadlines. Users can customize reminders for each recipient group,
such as billing reminders for finance or account check-in reminders
for sales.
Outlook
The company currently expects the following guidance:
▪ Quarter ending
January 31, 2024 (in millions, except percentages):
|
Total
revenue
|
$696
|
to
|
$700
|
Subscription
revenue
|
$679
|
to
|
$683
|
Billings
|
$758
|
to
|
$768
|
Non-GAAP gross
margin
|
81.0 %
|
to
|
82.0 %
|
Non-GAAP operating
margin
|
22.5 %
|
to
|
23.5 %
|
Non-GAAP diluted
weighted-average shares outstanding
|
207
|
to
|
212
|
▪ Year ending
January 31, 2024 (in millions, except
percentages):
|
Total
revenue
|
$2,746
|
to
|
$2,750
|
Subscription
revenue
|
$2,670
|
to
|
$2,674
|
Billings
|
$2,835
|
to
|
$2,845
|
Non-GAAP gross
margin
|
81.5 %
|
to
|
82.5 %
|
Non-GAAP operating
margin
|
24.0 %
|
to
|
25.0 %
|
Non-GAAP diluted
weighted-average shares outstanding
|
207
|
to
|
212
|
The company has not reconciled its guidance of non-GAAP
financial measures to the corresponding GAAP measures because
stock-based compensation expense cannot be reasonably calculated or
predicted at this time. Accordingly, a reconciliation has not been
provided.
Webcast Conference Call Information
The company will host a conference call on December 7, 2023
at 2:00 p.m. PT (5:00 p.m.
ET) to discuss its financial results. A live
webcast of the event will be available on the DocuSign Investor
Relations website at investor.docusign.com. A live dial-in
will be available domestically at 877-407-0784 or internationally
at 201-689-8560. A replay will be available domestically at
844-512-2921 or internationally at 412-317-6671 until midnight (ET)
December 21, 2023 using the passcode
13742533.
About DocuSign
DocuSign redefines how the world comes together and agrees,
making agreements smarter, easier and more trusted. As part of its
industry leading product lineup, DocuSign offers eSignature, the
world's #1 way to sign electronically on practically any device,
from almost anywhere, at any time. Today, over 1.4 million
customers and more than a billion users in over 180 countries use
DocuSign products and solutions to accelerate the process of doing
business and simplify people's lives. For more information visit
http://www.docusign.com.
Copyright 2023. DocuSign, Inc. is the owner of DOCUSIGN® and all
its other marks (www.docusign.com/IP).
Investor Relations:
DocuSign Investor Relations
investors@docusign.com
Media Relations:
DocuSign Corporate Communications
media@docusign.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which statements involve substantial risk and
uncertainties. All statements contained in this press release other
than statements of historical fact, including statements regarding
our future operating results and financial position, our business
strategy and plans, market growth and trends, objectives for future
operations, and the impact of such assumptions on our financial
condition and results of operations are forward-looking statements.
Forward-looking statements in this press release also include,
among other things, statements under "Outlook" above and any other
statements about expected financial metrics, such as revenue,
billings, non-GAAP gross margin, non-GAAP operating margin,
non-GAAP diluted weighted-average shares outstanding, and
non-financial metrics, such as our anticipated future products and
product strategies, as well as statements related to our
expectations regarding customer acceptance of those products.
Forward-looking statements generally relate to future events or our
future financial or operating performance. In some cases, you can
identify forward-looking statements because they contain words such
as "may," "will," "should," "expects," "plans," "anticipates,"
"could," "intends," "target," "projects," "contemplates,"
"believes," "estimates," "predicts," "potential," or "continue" or
the negative of these words or other similar terms or expressions
that concern our expectations, strategy, plans or intentions.
Forward-looking statements contained in this press release
include, but are not limited to, statements about: our expectations
regarding global macro-economic conditions, including the effects
of inflation, rising and fluctuating interest rates, instability in
the global banking sector, and market volatility on the global
economy; our ability to estimate the size and growth of our total
addressable market; our ability to compete effectively in an
evolving and competitive market; the impact of any data breaches,
cyberattacks or other malicious activity on our technology systems;
our ability to effectively sustain and manage our growth and future
expenses and achieve and maintain future profitability; our ability
to attract new customers and maintain and expand our existing
customer base; our ability to effectively implement and execute our
restructuring plans; our ability to scale and update our platform
to respond to customers' needs and rapid technological change,
including our ability to successfully incorporate generative
artificial intelligence into our existing and future products; our
ability to expand use cases within existing customers and vertical
solutions; our ability to expand our operations and increase
adoption of our platform internationally; our ability to strengthen
and foster our relationships with developers; our ability to retain
our direct sales force, customer success team and strategic
partnerships around the world; our ability to identify targets for
and execute potential acquisitions and to successfully integrate
and realize the anticipated benefits of such acquisitions; our
ability to maintain, protect and enhance our brand; the sufficiency
of our cash, cash equivalents and capital resources to satisfy our
liquidity needs; limitations on us due to obligations we have under
our credit facility or other indebtedness; our ability to realize
the anticipated benefits of our stock repurchase program; our
failure or the failure of our software to comply with applicable
industry standards, laws and regulations; our ability to maintain,
protect and enhance our intellectual property; our ability to
successfully defend litigation against us; our ability to attract
large organizations as users; our ability to maintain our corporate
culture; our ability to offer high-quality customer support; our
ability to hire, retain and motivate qualified personnel, including
executive level management; our ability to successfully manage and
integrate executive management transitions; uncertainties regarding
the impact of general economic and market conditions, including as
a result of regional and global conflicts; our ability to
successfully implement and maintain new and existing information
technology systems, including our ERP system; and our ability to
maintain proper and effective internal controls.
Additional risks and uncertainties that could affect our
financial results are included in the sections titled "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our annual report on Form
10-K for the fiscal year ended January 31, 2023 filed on
March 27, 2023, our quarterly report
on Form 10-Q for the quarter ended October 31, 2023, which we
expect to file on December 8, 2023 with the Securities and
Exchange Commission (the "SEC"), and other filings that we make
from time to time with the SEC. The forward-looking statements made
in this press release relate only to events as of the date on which
such statements are made. We undertake no obligation to update any
forward-looking statements after the date of this press release or
to conform such statements to actual results or revised
expectations, except as required by law.
Non-GAAP Financial Measures and Other Key Metrics
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use certain
non-GAAP financial measures, as described below, to understand and
evaluate our core operating performance. These non-GAAP financial
measures, which may be different than similarly-titled measures
used by other companies, are presented to enhance investors'
overall understanding of our financial performance and should not
be considered a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP.
We believe that these non-GAAP financial measures provide useful
information about our financial performance, enhance the overall
understanding of our past performance and future prospects, and
allow for greater transparency with respect to important metrics
used by our management for financial and operational
decision-making. We present these non-GAAP measures to assist
investors in seeing our financial performance using a management
view, and because we believe that these measures provide an
additional tool for investors to use in comparing our core
financial performance over multiple periods with other companies in
our industry. However, these non-GAAP measures are not intended to
be considered in isolation from, a substitute for, or superior to
our GAAP results.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP income from operations, non-GAAP
operating margin, non-GAAP net income and non-GAAP net income per
share: We define these non-GAAP financial measures as the
respective GAAP measures, excluding expenses related to stock-based
compensation, employer payroll tax on employee stock transactions,
amortization of acquisition-related intangibles, amortization of
debt discount and issuance costs, fair value adjustments to
strategic investments, executive transition costs, lease-related
impairment and lease-related charges, restructuring and other
related charges, as these costs are not reflective of ongoing
operations and, as applicable, other special items. The amount of
employer payroll tax-related items on employee stock transactions
is dependent on our stock price and other factors that are beyond
our control and do not correlate to the operation of the business.
When evaluating the performance of our business and making
operating plans, we do not consider these items (for example, when
considering the impact of equity award grants, we place a greater
emphasis on overall stockholder dilution rather than the accounting
charges associated with such grants). We believe it is useful to
exclude these expenses in order to better understand the long-term
performance of our core business and to facilitate comparison of
our results to those of peer companies and over multiple periods.
In addition to these exclusions, we subtract an assumed provision
for income taxes to calculate non-GAAP net income. We utilize a
fixed long-term projected tax rate in our computation of the
non-GAAP income tax provision to provide better consistency across
the reporting periods. For fiscal 2023 and fiscal 2024, we have
determined the projected non-GAAP tax rate to be 20%.
Free cash flow: We define free cash flow as net
cash provided by operating activities less purchases of
property and equipment. We believe free cash flow is an
important liquidity measure of the cash that is available (if any),
after purchases of property and equipment, for operational
expenses, investment in our business, and to make acquisitions.
Free cash flow is useful to investors as a liquidity measure
because it measures our ability to generate or use cash in excess
of our capital investments in property and equipment. Once our
business needs and obligations are met, cash can be used to
maintain a strong balance sheet and invest in future growth.
Billings: We define billings as total revenues plus the
change in our contract liabilities and refund liability less
contract assets and unbilled accounts receivable in a given period.
Billings reflects sales to new customers plus subscription renewals
and additional sales to existing customers. Only amounts invoiced
to a customer in a given period are included in billings. We
believe billings is a key metric to measure our periodic
performance. Given that most of our customers pay in annual
installments one year in advance, but we typically recognize a
majority of the related revenue ratably over time, we use billings
to measure and monitor our ability to provide our business with the
working capital generated by upfront payments from our
customers.
For a reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measure, please see
"Reconciliation of GAAP to Non-GAAP Financial Measures" below.
DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
682,352
|
|
$
624,055
|
|
$ 1,991,026
|
|
$ 1,798,500
|
Professional services
and other
|
18,069
|
|
21,408
|
|
58,470
|
|
57,839
|
Total
revenue
|
700,421
|
|
645,463
|
|
2,049,496
|
|
1,856,339
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
114,227
|
|
102,524
|
|
339,354
|
|
315,614
|
Professional services
and other
|
28,418
|
|
27,018
|
|
85,360
|
|
83,048
|
Total cost of
revenue
|
142,645
|
|
129,542
|
|
424,714
|
|
398,662
|
Gross
profit
|
557,776
|
|
515,921
|
|
1,624,782
|
|
1,457,677
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
292,473
|
|
313,783
|
|
867,916
|
|
938,062
|
Research and
development
|
136,640
|
|
115,934
|
|
387,964
|
|
354,693
|
General and
administrative
|
108,215
|
|
85,553
|
|
316,910
|
|
224,587
|
Restructuring and
other related charges
|
710
|
|
28,082
|
|
30,293
|
|
28,082
|
Total operating
expenses
|
538,038
|
|
543,352
|
|
1,603,083
|
|
1,545,424
|
Income (loss) from
operations
|
19,738
|
|
(27,431)
|
|
21,699
|
|
(87,747)
|
Interest
expense
|
(1,577)
|
|
(1,456)
|
|
(5,135)
|
|
(4,737)
|
Interest income and
other income (expense), net
|
17,673
|
|
820
|
|
47,373
|
|
(2,827)
|
Income (loss)
before provision for (benefit from) income taxes
|
35,834
|
|
(28,067)
|
|
63,937
|
|
(95,311)
|
Provision for (benefit
from) income taxes
|
(2,971)
|
|
1,799
|
|
17,198
|
|
7,006
|
Net income
(loss)
|
$ 38,805
|
|
$
(29,866)
|
|
$ 46,739
|
|
$
(102,317)
|
Net income (loss)
per share attributable to common stockholders:
|
|
|
|
|
Basic
|
$
0.19
|
|
$
(0.15)
|
|
$
0.23
|
|
$
(0.51)
|
Diluted
|
$
0.19
|
|
$
(0.15)
|
|
$
0.23
|
|
$
(0.51)
|
Weighted-average
shares used in computing net income (loss) per
share:
|
|
|
|
|
Basic
|
204,456
|
|
201,393
|
|
203,609
|
|
200,569
|
Diluted
|
208,054
|
|
201,393
|
|
208,317
|
|
200,569
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
Cost of
revenue—subscription
|
$ 13,705
|
|
$ 11,665
|
|
$ 38,143
|
|
$ 35,272
|
Cost of
revenue—professional services and other
|
7,343
|
|
6,767
|
|
21,359
|
|
18,327
|
Sales and
marketing
|
53,715
|
|
57,925
|
|
150,604
|
|
166,574
|
Research and
development
|
48,310
|
|
35,506
|
|
129,458
|
|
108,689
|
General and
administrative
|
36,337
|
|
23,384
|
|
111,271
|
|
58,314
|
Restructuring and
other related charges
|
8
|
|
5,590
|
|
4,996
|
|
5,590
|
DOCUSIGN,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(in
thousands)
|
October 31,
2023
|
|
January 31,
2023
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
1,188,578
|
|
$
721,895
|
Investments—current
|
401,639
|
|
309,771
|
Accounts receivable,
net
|
360,456
|
|
516,914
|
Contract
assets—current
|
19,381
|
|
12,437
|
Prepaid expenses and
other current assets
|
72,629
|
|
69,987
|
Total current
assets
|
2,042,683
|
|
1,631,004
|
Investments—noncurrent
|
55,448
|
|
186,049
|
Property and equipment,
net
|
230,963
|
|
199,892
|
Operating lease
right-of-use assets
|
126,198
|
|
141,493
|
Goodwill
|
351,493
|
|
353,619
|
Intangible assets,
net
|
55,605
|
|
70,280
|
Deferred contract
acquisition costs—noncurrent
|
383,205
|
|
350,899
|
Other
assets—noncurrent
|
92,032
|
|
79,484
|
Total
assets
|
$
3,337,627
|
|
$
3,012,720
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
14,787
|
|
$
24,393
|
Accrued expenses and
other current liabilities
|
99,642
|
|
100,987
|
Accrued
compensation
|
159,381
|
|
163,133
|
Convertible senior
notes—current
|
689,111
|
|
722,887
|
Contract
liabilities—current
|
1,204,599
|
|
1,172,867
|
Operating lease
liabilities—current
|
21,701
|
|
24,055
|
Total current
liabilities
|
2,189,221
|
|
2,208,322
|
Contract
liabilities—noncurrent
|
22,069
|
|
16,925
|
Operating lease
liabilities—noncurrent
|
124,551
|
|
141,348
|
Deferred tax
liability—noncurrent
|
17,160
|
|
10,723
|
Other
liabilities—noncurrent
|
19,593
|
|
18,115
|
Total
liabilities
|
2,372,594
|
|
2,395,433
|
Stockholders'
equity
|
|
|
|
Common
stock
|
20
|
|
20
|
Treasury
stock
|
(2,164)
|
|
(1,785)
|
Additional paid-in
capital
|
2,693,124
|
|
2,240,732
|
Accumulated other
comprehensive loss
|
(28,487)
|
|
(22,996)
|
Accumulated
deficit
|
(1,697,460)
|
|
(1,598,684)
|
Total stockholders'
equity
|
965,033
|
|
617,287
|
Total liabilities
and equity
|
$
3,337,627
|
|
$
3,012,720
|
DOCUSIGN,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ 38,805
|
|
$
(29,866)
|
|
$ 46,739
|
|
$ (102,317)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
23,324
|
|
21,532
|
|
71,429
|
|
63,976
|
Amortization of
deferred contract acquisition and fulfillment costs
|
49,399
|
|
44,806
|
|
147,781
|
|
134,381
|
Amortization of debt
discount and transaction costs
|
1,227
|
|
1,243
|
|
3,722
|
|
3,725
|
Non-cash operating
lease costs
|
4,768
|
|
7,002
|
|
16,499
|
|
20,468
|
Stock-based
compensation expense
|
159,418
|
|
140,835
|
|
455,831
|
|
392,765
|
Deferred income
taxes
|
3,845
|
|
(23)
|
|
7,265
|
|
3,045
|
Other
|
(571)
|
|
5,441
|
|
(1,353)
|
|
13,540
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
53,099
|
|
(83,084)
|
|
152,902
|
|
18,338
|
Prepaid expenses and
other current assets
|
6,463
|
|
8,435
|
|
(7,957)
|
|
(7,593)
|
Deferred contract
acquisition and fulfillment costs
|
(63,154)
|
|
(53,305)
|
|
(176,510)
|
|
(161,620)
|
Other
assets
|
(5,586)
|
|
(8,452)
|
|
(14,019)
|
|
(15,707)
|
Accounts
payable
|
11,205
|
|
2,948
|
|
(9,089)
|
|
(1,739)
|
Accrued expenses and
other liabilities
|
(7,792)
|
|
(2,094)
|
|
2,372
|
|
873
|
Accrued
compensation
|
(1,056)
|
|
(1,808)
|
|
(4,368)
|
|
(15,827)
|
Contract
liabilities
|
(3,582)
|
|
15,010
|
|
36,876
|
|
56,824
|
Operating lease
liabilities
|
(5,635)
|
|
(16,083)
|
|
(19,292)
|
|
(33,430)
|
Net cash provided by
operating activities
|
264,177
|
|
52,537
|
|
708,828
|
|
369,702
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of marketable
securities
|
(28,974)
|
|
(105,956)
|
|
(203,346)
|
|
(402,249)
|
Maturities of
marketable securities
|
87,500
|
|
121,590
|
|
251,517
|
|
311,769
|
Purchases of strategic
and other investments
|
(400)
|
|
(1,000)
|
|
(520)
|
|
(3,625)
|
Purchases of property
and equipment
|
(23,841)
|
|
(16,477)
|
|
(70,277)
|
|
(53,590)
|
Net cash provided by
(used in) investing activities
|
34,285
|
|
(1,843)
|
|
(22,626)
|
|
(147,695)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repayments of
convertible senior notes
|
(37,083)
|
|
—
|
|
(37,083)
|
|
(16)
|
Repurchases of common
stock
|
(75,035)
|
|
(38,034)
|
|
(145,515)
|
|
(63,041)
|
Settlement of capped
calls, net of related costs
|
—
|
|
—
|
|
23,688
|
|
—
|
Payment of tax
withholding obligation on net RSU settlement and ESPP
purchase
|
(35,615)
|
|
(23,263)
|
|
(98,296)
|
|
(67,120)
|
Proceeds from exercise
of stock options
|
12,375
|
|
383
|
|
13,207
|
|
11,009
|
Proceeds from employee
stock purchase plan
|
14,604
|
|
12,375
|
|
32,994
|
|
36,526
|
Net cash used in
financing activities
|
(120,754)
|
|
(48,539)
|
|
(211,005)
|
|
(82,642)
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
(7,187)
|
|
(6,612)
|
|
(4,897)
|
|
(14,652)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
170,521
|
|
(4,457)
|
|
470,300
|
|
124,713
|
Cash, cash equivalents
and restricted cash at beginning of period
(1)
|
1,022,980
|
|
638,849
|
|
723,201
|
|
509,679
|
Cash, cash equivalents
and restricted cash at end of period (1)
|
$
1,193,501
|
|
$
634,392
|
|
$
1,193,501
|
|
$
634,392
|
(1) Cash, cash equivalents and
restricted cash included restricted cash of $4.9 million and
$1.3 million at October 31, 2023 and January 31,
2023.
|
DOCUSIGN,
INC.
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
|
|
Reconciliation of
gross profit (loss) and gross margin:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP gross
profit
|
$
557,776
|
|
$
515,921
|
|
$
1,624,782
|
|
$
1,457,677
|
Add: Stock-based
compensation
|
21,048
|
|
18,432
|
|
59,502
|
|
53,599
|
Add: Amortization of
acquisition-related intangibles
|
2,070
|
|
2,425
|
|
6,787
|
|
7,232
|
Add: Employer payroll
tax on employee stock transactions
|
537
|
|
471
|
|
1,925
|
|
1,792
|
Add: Lease-related
impairment and lease-related charges
|
—
|
|
413
|
|
721
|
|
678
|
Non-GAAP gross
profit
|
$
581,431
|
|
$
537,662
|
|
$
1,693,717
|
|
$
1,520,978
|
GAAP gross
margin
|
80 %
|
|
80 %
|
|
79 %
|
|
79 %
|
Non-GAAP
adjustments
|
3 %
|
|
3 %
|
|
4 %
|
|
3 %
|
Non-GAAP gross
margin
|
83 %
|
|
83 %
|
|
83 %
|
|
82 %
|
|
|
|
|
|
|
|
|
GAAP subscription gross
profit
|
$
568,125
|
|
$
521,531
|
|
$
1,651,672
|
|
$
1,482,886
|
Add: Stock-based
compensation
|
13,705
|
|
11,665
|
|
38,143
|
|
35,272
|
Add: Amortization of
acquisition-related intangibles
|
2,070
|
|
2,425
|
|
6,787
|
|
7,232
|
Add: Employer payroll
tax on employee stock transactions
|
301
|
|
310
|
|
1,232
|
|
1,150
|
Add: Lease-related
impairment and lease-related charges
|
—
|
|
127
|
|
505
|
|
321
|
Non-GAAP subscription
gross profit
|
$
584,201
|
|
$
536,058
|
|
$
1,698,339
|
|
$
1,526,861
|
GAAP subscription gross
margin
|
83 %
|
|
84 %
|
|
83 %
|
|
82 %
|
Non-GAAP
adjustments
|
3 %
|
|
2 %
|
|
2 %
|
|
3 %
|
Non-GAAP subscription
gross margin
|
86 %
|
|
86 %
|
|
85 %
|
|
85 %
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$
(10,349)
|
|
$
(5,610)
|
|
$
(26,890)
|
|
$
(25,209)
|
Add: Stock-based
compensation
|
7,343
|
|
6,767
|
|
21,359
|
|
18,327
|
Add: Employer payroll
tax on employee stock transactions
|
236
|
|
161
|
|
693
|
|
642
|
Add: Lease-related
impairment and lease-related charges
|
—
|
|
286
|
|
216
|
|
357
|
Non-GAAP professional
services and other gross profit (loss)
|
$
(2,770)
|
|
$ 1,604
|
|
$
(4,622)
|
|
$
(5,883)
|
GAAP professional
services and other gross margin
|
(57) %
|
|
(26) %
|
|
(46) %
|
|
(44) %
|
Non-GAAP
adjustments
|
42 %
|
|
33 %
|
|
38 %
|
|
34 %
|
Non-GAAP professional
services and other gross margin
|
(15) %
|
|
7 %
|
|
(8) %
|
|
(10) %
|
Reconciliation of
operating expenses:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP sales and
marketing
|
$ 292,473
|
|
$ 313,783
|
|
$ 867,916
|
|
$ 938,062
|
Less: Stock-based
compensation
|
(53,715)
|
|
(57,925)
|
|
(150,604)
|
|
(166,574)
|
Less: Amortization of
acquisition-related intangibles
|
(2,629)
|
|
(2,688)
|
|
(7,888)
|
|
(8,522)
|
Less: Employer payroll
tax on employee stock transactions
|
(875)
|
|
(1,277)
|
|
(3,945)
|
|
(5,250)
|
Less: Lease-related
impairment and lease-related charges
|
—
|
|
(1,467)
|
|
(2,171)
|
|
(2,353)
|
Non-GAAP sales and
marketing
|
$ 235,254
|
|
$ 250,426
|
|
$ 703,308
|
|
$ 755,363
|
GAAP sales and
marketing as a percentage of revenue
|
42 %
|
|
49 %
|
|
42 %
|
|
51 %
|
Non-GAAP sales and
marketing as a percentage of revenue
|
34 %
|
|
39 %
|
|
34 %
|
|
41 %
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$ 136,640
|
|
$ 115,934
|
|
$ 387,964
|
|
$ 354,693
|
Less: Stock-based
compensation
|
(48,310)
|
|
(35,506)
|
|
(129,458)
|
|
(108,689)
|
Less: Employer payroll
tax on employee stock transactions
|
(876)
|
|
(608)
|
|
(3,671)
|
|
(3,009)
|
Less: Lease-related
impairment and lease-related charges
|
—
|
|
(434)
|
|
(873)
|
|
(819)
|
Non-GAAP research and
development
|
$
87,454
|
|
$
79,386
|
|
$ 253,962
|
|
$ 242,176
|
GAAP research and
development as a percentage of revenue
|
20 %
|
|
18 %
|
|
19 %
|
|
19 %
|
Non-GAAP research and
development as a percentage of revenue
|
12 %
|
|
12 %
|
|
12 %
|
|
13 %
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$ 108,215
|
|
$
85,553
|
|
$ 316,910
|
|
$ 224,587
|
Less: Stock-based
compensation
|
(36,337)
|
|
(23,384)
|
|
(111,271)
|
|
(58,314)
|
Less: Employer payroll
tax on employee stock transactions
|
(564)
|
|
(180)
|
|
(1,541)
|
|
(926)
|
Less: Executive
transition costs
|
—
|
|
(830)
|
|
—
|
|
(2,634)
|
Less: Lease-related
impairment and lease-related charges
|
—
|
|
(363)
|
|
(695)
|
|
(655)
|
Non-GAAP general and
administrative
|
$
71,314
|
|
$
60,796
|
|
$ 203,403
|
|
$ 162,058
|
GAAP general and
administrative as a percentage of revenue
|
15 %
|
|
13 %
|
|
15 %
|
|
12 %
|
Non-GAAP general and
administrative as a percentage of revenue
|
10 %
|
|
9 %
|
|
10 %
|
|
9 %
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP income (loss) from
operations
|
$
19,738
|
|
$ (27,431)
|
|
$
21,699
|
|
$ (87,747)
|
Add: Stock-based
compensation
|
159,410
|
|
135,247
|
|
450,835
|
|
387,176
|
Add: Amortization of
acquisition-related intangibles
|
4,699
|
|
5,113
|
|
14,675
|
|
15,754
|
Add: Employer payroll
tax on employee stock transactions
|
2,852
|
|
2,536
|
|
11,082
|
|
10,977
|
Add: Restructuring and
other related charges
|
710
|
|
28,082
|
|
30,293
|
|
28,082
|
Add: Executive
transition costs
|
—
|
|
830
|
|
—
|
|
2,634
|
Add: Lease-related
impairment and lease-related charges
|
—
|
|
2,677
|
|
4,460
|
|
4,505
|
Non-GAAP income from
operations
|
$ 187,409
|
|
$ 147,054
|
|
$ 533,044
|
|
$ 361,381
|
GAAP operating
margin
|
3 %
|
|
(4) %
|
|
1 %
|
|
(5) %
|
Non-GAAP
adjustments
|
24 %
|
|
27 %
|
|
25 %
|
|
24 %
|
Non-GAAP operating
margin
|
27 %
|
|
23 %
|
|
26 %
|
|
19 %
|
Reconciliation of
net income (loss) and net income (loss) per share, basic and
diluted:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net income
(loss)
|
$ 38,805
|
|
$
(29,866)
|
|
$ 46,739
|
|
$
(102,317)
|
Add: Stock-based
compensation
|
159,410
|
|
135,247
|
|
450,835
|
|
387,176
|
Add: Amortization of
acquisition-related intangibles
|
4,699
|
|
5,113
|
|
14,675
|
|
15,754
|
Add: Employer payroll
tax on employee stock transactions
|
2,852
|
|
2,536
|
|
11,082
|
|
10,977
|
Add: Amortization of
debt discount and issuance costs
|
1,250
|
|
1,197
|
|
4,149
|
|
3,679
|
Add: Fair value
adjustments to strategic investments
|
—
|
|
45
|
|
119
|
|
(384)
|
Add: Restructuring and
other related charges
|
710
|
|
28,082
|
|
30,293
|
|
28,082
|
Add: Executive
transition costs
|
—
|
|
830
|
|
—
|
|
2,634
|
Add: Lease-related
impairment and lease-related charges
|
—
|
|
2,677
|
|
4,460
|
|
4,505
|
Add: Income tax effect
of non-GAAP adjustments
|
(43,922)
|
|
(27,733)
|
|
(98,712)
|
|
(64,416)
|
Non-GAAP net
income
|
$
163,804
|
|
$
118,128
|
|
$
463,640
|
|
$
285,690
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
163,804
|
|
$
118,128
|
|
$
463,640
|
|
$
285,690
|
Add: Interest expense
on convertible senior notes
|
22
|
|
46
|
|
425
|
|
75
|
Non-GAAP net income
attributable to common stockholders, diluted
|
$
163,826
|
|
$
118,174
|
|
$
464,065
|
|
$
285,765
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding, basic
|
204,456
|
|
201,393
|
|
203,609
|
|
200,569
|
Effect of dilutive
securities
|
3,598
|
|
4,255
|
|
4,708
|
|
5,721
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
208,054
|
|
205,648
|
|
208,317
|
|
206,290
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
per share, basic
|
$
0.19
|
|
$
(0.15)
|
|
$
0.23
|
|
$
(0.51)
|
GAAP net income (loss)
per share, diluted
|
$
0.19
|
|
$
(0.15)
|
|
$
0.23
|
|
$
(0.51)
|
Non-GAAP net income
per share, basic
|
0.80
|
|
0.59
|
|
$
2.28
|
|
$
1.42
|
Non-GAAP net income
per share, diluted
|
0.79
|
|
0.57
|
|
$
2.23
|
|
$
1.39
|
Computation of free
cash flow:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
264,177
|
|
$ 52,537
|
|
$
708,828
|
|
$
369,702
|
Less: Purchases of
property and equipment
|
(23,841)
|
|
(16,477)
|
|
(70,277)
|
|
(53,590)
|
Non-GAAP free cash
flow
|
$
240,336
|
|
$ 36,060
|
|
$
638,551
|
|
$
316,112
|
Net cash provided by
(used in) investing activities
|
$ 34,285
|
|
$
(1,843)
|
|
$
(22,626)
|
|
$
(147,695)
|
Net cash used in
financing activities
|
$
(120,754)
|
|
$
(48,539)
|
|
$
(211,005)
|
|
$
(82,642)
|
Computation of
billings:
|
|
Three Months Ended
October 31,
|
|
Nine Months Ended
October 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
700,421
|
|
$
645,463
|
|
$ 2,049,496
|
|
$ 1,856,339
|
Add: Contract
liabilities and refund liability, end of period
|
1,228,174
|
|
1,113,131
|
|
1,228,174
|
|
1,113,131
|
Less: Contract
liabilities and refund liability, beginning of period
|
(1,233,894)
|
|
(1,094,939)
|
|
(1,191,269)
|
|
(1,049,106)
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
22,358
|
|
13,695
|
|
16,615
|
|
18,273
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(25,253)
|
|
(17,945)
|
|
(25,253)
|
|
(17,945)
|
Non-GAAP
billings
|
$
691,806
|
|
$
659,405
|
|
$ 2,077,763
|
|
$ 1,920,692
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multimedia:https://www.prnewswire.com/news-releases/docusign-announces-third-quarter-fiscal-2024-financial-results-302009384.html
SOURCE DocuSign, Inc.