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DocuSign Inc. – DocuSign Announces Third Quarter Fiscal 2024 Financial Results


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 Ma
    gic 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

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 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

 


Cision View original content to download multimedia:

SOURCE DocuSign, Inc.


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