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DocuSign Inc. – DocuSign Announces Second Quarter Fiscal 2024 Financial Results; Announces Increase to Share Repurchase Program

SAN FRANCISCO, Sept. 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 July 31, 2023.

“Our results for the first half were solid and reflect strong progress on our business transformation,” said Allan Thygesen, CEO of DocuSign. “We increased our pace of innovation by delivering key new features, while strengthening our self-service and partner distribution channels, and we’ve received tremendous enthusiasm on our product roadmap, particularly from our enterprise customers.”

Second
Quarter Financial Highlights

  • Total revenue was $687.7 million, an increase of 11% year-over-year. Subscription revenue was $669.4 million, an increase of 11% year-over-year. Professional services and other revenue was $18.3 million, an increase of 8% year-over-year.
  • Billings were $711.2 million, an increase of 10% year-over-year.
  • GAAP gross margin was 79% compared to 78% in the same period last year. Non-GAAP gross margin was 82% for both periods.
  • GAAP net income per basic share was $0.04 on 204 million shares outstanding compared to a loss of $0.22 on 201 million shares outstanding in the same period last year.
  • GAAP net income per diluted share was $0.04 on 208 million shares outstanding compared to a loss of $0.22 on 201 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.72 on 208 million shares outstanding compared to $0.44 on 206 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $211.0 million compared to $120.9 million in the same period last year.
  • Free cash flow was $183.6 million compared to $105.5 million in the same period last year.
  • Cash, cash equivalents, restricted cash
    and investments were $1.5 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:

  • DocuSign 2023 Release 2. DocuSign announced new product capabilities with highlights in the following areas:
    • Liveness Detection for ID Verification: DocuSign launched enhanced identity verification offering, Liveness Detection for ID Verification. Part of DocuSign’s Identify portfolio, this new feature uses AI-enabled biometric checks to confirm signers are who they say they are, are physically present at signing and that their IDs are valid. This results in improved trust, compliance and a simplified user experience.
    • DocuSign Monitor Integration with CLM: DocuSign launched DocuSign Monitor integration with CLM, providing customers with deeper, real-time visibility into their entire contract lifecycle. The integration enables admins to evaluate user behavior with rules-based alerts, investigate security incidents, and proactively identify unwanted risks. CLM admins will be alerted of suspicious user activity such as unauthorized access, deletion or downloading of documents, potential external brute-force attacks, and logins from unknown locations.
    • Enhanced Comments for DocuSign CLM: DocuSign introduced enhancements designed to streamline operations within CLM. Allows collaborators and stakeholders to review the latest editing activity, assign workflow tasks to individuals and groups, and interact with key stakeholders in parallel to reach consensus faster.
  • Increase to Stock Repurchase Program
    • DocuSign’s board of directors has authorized an increase of $300 million to its existing stock repurchase program for a total aggregate amount of up to $500 million of DocuSign’s outstanding common stock. The program has no minimum purchase commitment and no mandated end date. The repurchase is expected to be executed, subject to general business and market conditions and other investment opportunities, through open market purchases, and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased common stock will be determined by DocuSign’s management based on its evaluation of market conditions and other factors. The repurchase program does not obligate DocuSign to acquire any particular amount of common stock and the repurchase program may be suspended or discontinued at any time at DocuSign’s discretion without prior notice.

Outlook

The company currently expects the following guidance:


• Quarter ending October 31, 2023 (in millions, except percentages):

Total revenue

$687

to

$691

Subscription revenue

$669

to

$673

Billings

$668

to

$678

Non-GAAP gross margin

81 %

to

82 %

Non-GAAP operating margin

22 %

to

23 %

Non-GAAP diluted weighted-average shares outstanding

207

to

212

 


• Year ending January 31, 2024 (in millions, except percentages):

Total revenue

$2,725

to

$2,737

Subscription revenue

$2,649

to

$2,661

Billings

$2,804

to

$2,824

Non-GAAP gross margin

81 %

to

82 %

Non-GAAP operating margin

23 %

to

24 %

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 September 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) September 21, 2023 using the passcode 13740493.

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

Copyright 2023. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

Investor Relations:
DocuSign Investor Relations
[email protected]

Media Relations:
DocuSign Corporate Communications
[email protected]

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 diluted weighted-average shares outstanding, and non-financial metrics, such as customer growth, as well as statements related to our expectations regarding our growth, and our intention to repurchase up to an additional $300 million of our common stock, including the expected timing, duration, volume and nature of such stock repurchase program. 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; 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 July 31, 2023, which we expect to file on September 7, 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.

 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands, except per share data)


2023


2022


2023


2022


Revenue:

Subscription

$    669,367

$    605,194

$ 1,308,674

$ 1,174,445

Professional services and other

18,320

16,990

40,401

36,431

Total revenue

687,687

622,184

1,349,075

1,210,876


Cost of revenue:

Subscription

116,185

107,931

225,127

213,090

Professional services and other

29,397

28,773

56,942

56,030

Total cost of revenue

145,582

136,704

282,069

269,120


Gross profit

542,105

485,480

1,067,006

941,756


Operating expenses:

Sales and marketing

294,838

323,582

575,443

624,279

Research and development

135,960

126,532

251,324

238,759

General and administrative

103,884

76,456

208,695

139,034

Restructuring and other related charges

811

29,583

Total operating expenses

535,493

526,570

1,065,045

1,002,072


Income (loss) from operations

6,612

(41,090)

1,961

(60,316)

Interest expense

(1,592)

(1,632)

(3,558)

(3,281)

Interest income and other income (expense), net

17,455

1,003

29,700

(3,647)


Income (loss) before provision for income taxes

22,475

(41,719)

28,103

(67,244)

Provision for income taxes

15,080

3,359

20,169

5,207


Net income (loss)

$       7,395

$    (45,078)

$       7,934

$    (72,451)


Net income (loss) per share attributable to common stockholders:

Basic

$         0.04

$        (0.22)

$         0.04

$        (0.36)

Diluted

$         0.04

$        (0.22)

$         0.04

$        (0.36)


Weighted-average shares used in computing net income (loss) per share:

Basic

203,703

200,618

203,177

200,150

Diluted

208,192

200,618

208,284

200,150


Stock-based compensation expense included in costs and expenses:

Cost of revenue—subscription

$      13,081

$      12,994

$      24,438

$      23,607

Cost of revenue—professional services and other

7,286

6,478

14,016

11,560

Sales and marketing

51,563

61,218

96,889

108,649

Research and development

45,151

40,978

81,148

73,183

General and administrative

34,592

19,539

74,934

34,931

Restructuring and other related charges

34

4,988

 


CONDENSED CONSOLIDATED BALANCE SHEETS


(Unaudited)

 


(in thousands)


July 31, 2023


January 31, 2023


Assets

Current assets

Cash and cash equivalents

$           1,017,778

$              721,895

Investments—current

426,271

309,771

Accounts receivable, net

414,740

516,914

Contract assets—current

16,188

12,437

Prepaid expenses and other current assets

81,492

69,987

Total current assets

1,956,469

1,631,004

Investments—noncurrent

85,202

186,049

Property and equipment, net

220,916

199,892

Operating lease right-of-use assets

131,341

141,493

Goodwill

353,345

353,619

Intangible assets, net

60,304

70,280

Deferred contract acquisition costs—noncurrent

369,749

350,899

Other assets—noncurrent

90,079

79,484


Total assets

$           3,267,405

$           3,012,720


Liabilities and Equity

Current liabilities

Accounts payable

$                  5,803

$                24,393

Accrued expenses and other current liabilities

109,349

100,987

Accrued compensation

162,243

163,133

Convertible senior notes—current

725,105

722,887

Contract liabilities—current

1,208,411

1,172,867

Operating lease liabilities—current

23,053

24,055

Total current liabilities

2,233,964

2,208,322

Contract liabilities—noncurrent

21,839

16,925

Operating lease liabilities—noncurrent

130,746

141,348

Deferred tax liability—noncurrent

13,923

10,723

Other liabilities—noncurrent

19,174

18,115

Total liabilities

2,419,646

2,395,433

Stockholders’ equity

Common stock

20

20

Treasury stock

(2,027)

(1,785)

Additional paid-in capital

2,530,532

2,240,732

Accumulated other comprehensive loss

(19,536)

(22,996)

Accumulated deficit

(1,661,230)

(1,598,684)

Total stockholders’ equity

847,759

617,287


Total liabilities and equity

$           3,267,405

$           3,012,720

 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022


Cash flows from operating activities:

Net income (loss)

$       7,395

$    (45,078)

$       7,934

$    (72,451)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

25,238

21,143

48,105

42,444

Amortization of deferred contract acquisition and fulfillment costs

50,152

45,585

98,382

89,575

Amortization of debt discount and transaction costs

1,249

1,198

2,495

2,482

Non-cash operating lease costs

5,751

7,024

11,731

13,466

Stock-based compensation expense

151,707

141,207

296,413

251,930

Deferred income taxes

1,797

2,996

3,420

3,068

Other

49

3,192

(782)

8,099

Changes in operating assets and liabilities:

Accounts receivable

(8,478)

(38,656)

99,803

101,422

Prepaid expenses and other current assets

2,383

323

(14,420)

(16,028)

Deferred contract acquisition and fulfillment costs

(56,830)

(57,803)

(113,356)

(108,315)

Other assets

(772)

204

(8,433)

(7,255)

Accounts payable

(11,273)

18,510

(20,294)

(4,687)

Accrued expenses and other liabilities

9,069

(2,181)

10,164

2,967

Accrued compensation

18,270

9,201

(3,312)

(14,019)

Contract liabilities

22,171

23,102

40,458

41,814

Operating lease liabilities

(6,862)

(9,088)

(13,657)

(17,347)

Net cash provided by operating activities

211,016

120,879

444,651

317,165


Cash flows from investing activities:

Purchases of marketable securities

(120,542)

(166,558)

(174,372)

(296,293)

Maturities of marketable securities

83,318

99,124

164,017

190,179

Purchases of strategic and other investments

(120)

(500)

(120)

(2,625)

Purchases of property and equipment

(27,379)

(15,404)

(46,436)

(37,113)

Net cash used in investing activities

(64,723)

(83,338)

(56,911)

(145,852)


Cash flows from financing activities:

Repayments of convertible senior notes

(16)

(16)

Repurchases of common stock

(30,008)

(25,007)

(70,480)

(25,007)

Settlement of capped calls, net of related costs

23,688

Payment of tax withholding obligation on net RSU settlement and ESPP purchase

(40,044)

(19,118)

(62,681)

(43,857)

Proceeds from exercise of stock options

705

8,688

832

10,626

Proceeds from employee stock purchase plan

18,390

24,151

Net cash used in financing activities

(69,347)

(35,453)

(90,251)

(34,103)

Effect of foreign exchange on cash, cash equivalents and restricted cash

1,279

(2,860)

2,290

(8,040)

Net increase in cash, cash equivalents and restricted cash

78,225

(772)

299,779

129,170

Cash, cash equivalents and restricted cash at beginning of period (1)

944,755

639,621

723,201

509,679

Cash, cash equivalents and restricted cash at end of period (1)

$ 1,022,980

$    638,849

$ 1,022,980

$    638,849


(1) Cash, cash equivalents and restricted cash included restricted cash of $5.2 million and $1.3 million at July 31, 2023 and January 31, 2023.

 


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES


(Unaudited)


Reconciliation of gross profit (loss) and gross margin:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022

GAAP gross profit

$   542,105

$   485,480

$  1,067,006

$   941,756

Add: Stock-based compensation

20,367

19,472

38,454

35,167

Add: Amortization of acquisition-related intangibles

2,314

2,403

4,717

4,807

Add: Employer payroll tax on employee stock transactions

713

530

1,387

1,321

Add: Lease-related impairment and lease-related charges

292

265

721

265

Non-GAAP gross profit

$   565,791

$   508,150

$  1,112,285

$   983,316

GAAP gross margin

79 %

78 %

79 %

78 %

Non-GAAP adjustments

3 %

4 %

3 %

3 %

Non-GAAP gross margin

82 %

82 %

82 %

81 %

GAAP subscription gross profit

$   553,182

$   497,263

$  1,083,547

$   961,355

Add: Stock-based compensation

13,081

12,994

24,438

23,607

Add: Amortization of acquisition-related intangibles

2,314

2,403

4,717

4,807

Add: Employer payroll tax on employee stock transactions

465

332

930

840

Add: Lease-related impairment and lease-related charges

206

194

505

194

Non-GAAP subscription gross profit

$   569,248

$   513,186

$  1,114,137

$   990,803

GAAP subscription gross margin

83 %

82 %

83 %

82 %

Non-GAAP adjustments

2 %

3 %

2 %

2 %

Non-GAAP subscription gross margin

85 %

85 %

85 %

84 %

GAAP professional services and other gross loss

$  (11,077)

$  (11,783)

$  (16,541)

$  (19,599)

Add: Stock-based compensation

7,286

6,478

14,016

11,560

Add: Employer payroll tax on employee stock transactions

248

198

457

481

Add: Lease-related impairment and lease-related charges

86

71

216

71

Non-GAAP professional services and other gross loss

$    (3,457)

$    (5,036)

$    (1,852)

$    (7,487)

GAAP professional services and other gross margin

(60) %

(69) %

(41) %

(54) %

Non-GAAP adjustments

41 %

39 %

36 %

33 %

Non-GAAP professional services and other gross margin

(19) %

(30) %

(5) %

(21) %

 


Reconciliation of operating expenses:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022

GAAP sales and marketing

$ 294,838

$ 323,582

$ 575,443

$ 624,279

Less: Stock-based compensation

(51,563)

(61,218)

(96,889)

(108,649)

Less: Amortization of acquisition-related intangibles

(2,630)

(2,630)

(5,259)

(5,834)

Less: Employer payroll tax on employee stock transactions

(1,400)

(1,683)

(3,070)

(3,973)

Less: Lease-related impairment and lease-related charges

(815)

(886)

(2,171)

(886)

Non-GAAP sales and marketing

$ 238,430

$ 257,165

$ 468,054

$ 504,937

GAAP sales and marketing as a percentage of revenue

43 %

52 %

43 %

52 %

Non-GAAP sales and marketing as a percentage of revenue

35 %

41 %

35 %

42 %

GAAP research and development

$ 135,960

$ 126,532

$ 251,324

$ 238,759

Less: Stock-based compensation

(45,151)

(40,978)

(81,148)

(73,183)

Less: Employer payroll tax on employee stock transactions

(1,387)

(868)

(2,795)

(2,401)

Less: Lease-related impairment and lease-related charges

(381)

(385)

(873)

(385)

Non-GAAP research and development

$   89,041

$   84,301

$ 166,508

$ 162,790

GAAP research and development as a percentage of revenue

20 %

20 %

19 %

20 %

Non-GAAP research and development as a percentage of revenue

13 %

14 %

12 %

13 %

GAAP general and administrative

$ 103,884

$   76,456

$ 208,695

$ 139,034

Less: Stock-based compensation

(34,592)

(19,539)

(74,934)

(34,931)

Less: Employer payroll tax on employee stock transactions

(546)

(304)

(978)

(789)

Less: Executive transition costs

(1,804)

(1,804)

Less: Lease-related impairment and lease-related charges

(296)

(292)

(695)

(292)

Non-GAAP general and administrative

$   68,450

$   54,517

$ 132,088

$ 101,218

GAAP general and administrative as a percentage of revenue

15 %

13 %

15 %

11 %

Non-GAAP general and administrative as a percentage of revenue

10 %

9 %

10 %

8 %

 


Reconciliation of income (loss) from operations and operating margin:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022

GAAP income (loss) from operations

$    6,612

$ (41,090)

$    1,961

$ (60,316)

Add: Stock-based compensation

151,673

141,207

291,425

251,930

Add: Amortization of acquisition-related intangibles

4,944

5,033

9,976

10,641

Add: Employer payroll tax on employee stock transactions

4,046

3,385

8,230

8,484

Add: Restructuring and other related charges

811

29,583

Add: Executive transition costs

1,804

1,804

Add: Lease-related impairment and lease-related charges

1,784

1,828

4,460

1,828

Non-GAAP income from operations

$ 169,870

$ 112,167

$ 345,635

$ 214,371

GAAP operating margin

1 %

(7) %

— %

(5) %

Non-GAAP adjustments

24 %

25 %

26 %

23 %

Non-GAAP operating margin

25 %

18 %

26 %

18 %

 


Reconciliation of net income (loss) and net income (loss) per share, basic and diluted:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands, except per share data)


2023


2022


2023


2022

GAAP net income (loss)

$       7,395

$    (45,078)

$       7,934

$    (72,451)

Add: Stock-based compensation

151,673

141,207

291,425

251,930

Add: Amortization of acquisition-related intangibles

4,944

5,033

9,976

10,641

Add: Employer payroll tax on employee stock transactions

4,046

3,385

8,230

8,484

Add: Amortization of debt discount and issuance costs

1,294

1,198

2,898

2,482

Less: Fair value adjustments to strategic investments

(89)

119

(429)

Add: Restructuring and other related charges

811

29,583

Add: Executive transition costs

1,804

1,804

Add: Lease-related impairment and lease-related charges

1,784

1,828

4,460

1,828

Add: Income tax effect of non-GAAP adjustments

(22,325)

(19,171)

(54,790)

(36,692)

Non-GAAP net income

$    149,622

$      90,117

$    299,835

$    167,597


Numerator:

Non-GAAP net income

$    149,622

$      90,117

$    299,835

$    167,597

Add: Interest expense on convertible senior notes

46

46

403

29

Non-GAAP net income attributable to common stockholders, diluted

$    149,668

$      90,163

$    300,238

$    167,626


Denominator:

Weighted-average common shares outstanding, basic

203,703

200,618

203,177

200,150

Effect of dilutive securities

4,489

5,024

5,107

5,666

Non-GAAP weighted-average common shares outstanding, diluted

208,192

205,642

208,284

205,816

GAAP net income (loss) per share, basic

$         0.04

$        (0.22)

$         0.04

$        (0.36)

GAAP net income (loss) per share, diluted

$         0.04

$        (0.22)

$         0.04

$        (0.36)

Non-GAAP net income per share, basic

0.73

0.45

$         1.48

$         0.84

Non-GAAP net income per share, diluted

0.72

0.44

$         1.44

$         0.81

 


Computation of free cash flow:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022

Net cash provided by operating activities

$    211,016

$    120,879

$    444,651

$    317,165

Less: Purchases of property and equipment

(27,379)

(15,404)

(46,436)

(37,113)

Non-GAAP free cash flow

$    183,637

$    105,475

$    398,215

$    280,052

Net cash used in investing activities

$    (64,723)

$    (83,338)

$    (56,911)

$  (145,852)

Net cash used in financing activities

$    (69,347)

$    (35,453)

$    (90,251)

$    (34,103)

 


Computation of billings:


Three Months Ended July 31,


Six Months Ended July 31,


(in thousands)


2023


2022


2023


2022

Revenue

$    687,687

$    622,184

$ 1,349,075

$ 1,210,876

Add: Contract liabilities and refund liability, end of period

1,233,894

1,094,939

1,233,894

1,094,939

Less: Contract liabilities and refund liability, beginning of period

(1,210,965)

(1,074,460)

(1,191,269)

(1,049,106)

Add: Contract assets and unbilled accounts receivable, beginning of period

22,936

18,756

16,615

18,273

Less: Contract assets and unbilled accounts receivable, end of period

(22,358)

(13,695)

(22,358)

(13,695)

Non-GAAP billings

$    711,194

$    647,724

$ 1,385,957

$ 1,261,287

 

Cision View original content:

SOURCE DocuSign, Inc.


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