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DocuSign Inc. – DocuSign Announces Third Quarter Fiscal 2023 Financial Results


SAN FRANCISCO, Dec. 8, 2022 /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, 2022.



DocuSign, Inc. (PRNewsFoto/DocuSign, Inc.)

“We delivered solid third quarter results, and are pleased with the continued progress against our critical priorities,” said Allan Thygesen, CEO of DocuSign. “DocuSign is the pioneer and leader in eSignature. This gives us a strong foundation to create and deliver a delightful and differentiated workflow experience, making agreements smarter and easier for companies of all sizes.  I look forward to continuing to advance our business, as we both innovate and operate at scale to deliver value for all of our stakeholders.”


Third Quarter Financial Highlights


  • Total revenue was $645.5 million, an increase of 18% year-over-year. Subscription revenue was $624.1 million, an increase of 18% year-over-year. Professional services and other revenue was $21.4 million, an increase of 27% year-over-year.

  • Billings were $659.4 million, an increase of 17% year-over-year.

  • GAAP gross margin was 80% compared to 79% in the same period last year. Non-GAAP gross margin was 83% compared to 82% in the same period last year.

  • GAAP net loss per basic and diluted share was $0.15 on 201 million shares outstanding compared to $0.03 on 198 million shares outstanding in the same period last year.

  • Non-GAAP net income per diluted share was $0.57 on 206 million shares outstanding compared to $0.58 on 208 million shares outstanding in the same period last year.

  • Net cash provided by operating activities was $52.5 million compared to $105.4 million in the same period last year.

  • Free cash flow was $36.1 million compared to $90.0 million in the same period last year.

  • Cash, cash equivalents, restricted cash
    and investments were $1.1 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:


  • 2022 Gartner Magic Quadrant Leader. For the third year in a row, DocuSign was named a Leader in the 2022 Magic Quadrant for CLM research report by Gartner, Inc. This year, DocuSign was placed highest among the 18 vendors evaluated on the “ability to execute” axis, and highly on the “completeness of vision” axis.

  • DocuSign Agreement Cloud 2022 Product Release 3. DocuSign announced many new product capabilities with highlights in the following areas:

    • DocuSign eSignature. Introduced Elastic Signing, which enables organizations to deliver a personalized signing experience that is fast and seamless. Organizations can provide a fully customizable UI across their websites and mobile apps, display content based on conditional logic, and let users sign with the click of a button for a digital-first experience that drives higher completion.

    • Enhanced workflows within Microsoft Applications. DocuSign announced enhancement to eSignature for Microsoft Teams, allowing users to send and sign agreements natively, within Microsoft Teams. DocuSign also announced eSignature enhancements utilizing Microsoft Power Automate and Microsoft SharePoint.

    • DocuSign CLM. Introduced enhancements to the document review experience within CLM Essentials with a more accessible and user-friendly interface. Other enhancements include a new process reporting feature for CLM Essentials and improved insights regarding contract renewals and notice periods.

    • DocuSign Notary. Digital certificates for DocuSign Notary provides new users with digital certificates to attach to each notarial transaction, meeting or exceeding digital certificates requirements for all states. Notaries public will be able to onboard significantly faster than with third-party certificate authorities as well as save on certificate fees.


Outlook

The company currently expects the following guidance: 




















▪  Quarter ending January 31, 2023 (in millions, except percentages):
















Total revenue


$637


to


$641


Subscription revenue


$624


to


$628


Billings


$705


to


$715


Non-GAAP gross margin


82 %


to


83 %


Non-GAAP operating margin


20 %


to


22 %


Non-GAAP diluted weighted-average shares outstanding


205


to


210










▪  Year ending January 31, 2023 (in millions, except percentages):
















Total revenue


$2,493


to


$2,497


Subscription revenue


$2,423


to


$2,427


Billings


$2,626


to


$2,636


Non-GAAP gross margin


81 %


to


82 %


Non-GAAP operating margin


18 %


to


20 %


Non-GAAP diluted weighted-average shares outstanding


205


to


210

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 8, 2022 at 1:30 p.m. PT (4:30 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 22, 2022 using the passcode 13734316.


About DocuSign

DocuSign helps organizations connect and automate how they navigate their systems of agreement. 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 1.3 million customers and more than a billion users in over 180 countries use the DocuSign platform to accelerate the process of doing business and simplify people’s lives. For more information visit

Copyright 2022. 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, that are based on our management’s beliefs and assumptions and on information currently available to management, and which statements involve substantial risk and uncertainties. Forward-looking statements include all statements that are not historical facts and can be identified by terms 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 in this press release 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. They also include statements about our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations. These statements are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

These risks and uncertainties include, among other things, risks related to our expectations regarding global macro-economic conditions, including the effects of inflation, rising and fluctuating interest rates and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market, and the development of the market for our products, which is new and evolving; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers and maintain and expand our existing customer base; our ability to effectively implement and execute our restructuring plan; the impact of the coronavirus pandemic (the “COVID-19 pandemic”) or its abatement, on our business, results of operations, financial condition, and future profitability and growth; the impact of the evolving COVID-19 pandemic on the businesses of our customers, partners and suppliers, and the economy; our ability to scale and update our platform to respond to customers’ needs and rapid technological change; the effects of increased competition in our market and our ability to compete effectively; 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 expand our direct sales force, customer success team and strategic partnerships around the world; the impact of any data breaches, cyberattacks or other malicious activity on our technology systems; our ability to identify targets for and execute potential acquisitions; our ability to successfully integrate the operations of businesses we may acquire, and to 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 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 or related government sanctions; 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, 2022 filed on March 25, 2022, our quarterly report on Form 10-Q for the quarter ended October 31, 2022, which we expect to file on December 8, 2022 with the Securities and Exchange Commission (the “SEC”), and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.


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, acquisition-related expenses, 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, we determined the projected non-GAAP tax rate to be 20% tax rate.


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. In this press release, we have not reconciled our 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.

 







































CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands, except per share data)



2022





2021





2022





2021



Revenue:
















Subscription


$    624,055




$    528,573




$ 1,798,500




$ 1,473,266


Professional services and other


21,408




16,890




57,839




53,119


Total revenue


645,463




545,463




1,856,339




1,526,385



Cost of revenue:
















Subscription


102,524




84,579




315,614




247,105


Professional services and other


27,018




31,396




83,048




87,892


Total cost of revenue


129,542




115,975




398,662




334,997



Gross profit


515,921




429,488




1,457,677




1,191,388



Operating expenses:
















Sales and marketing


313,783




275,619




938,062




777,110


Research and development


115,934




102,603




354,693




282,670


General and administrative


85,553




54,624




224,587




168,314


Restructuring and other related charges


28,082







28,082





Total operating expenses


543,352




432,846




1,545,424




1,228,094



Loss from operations


(27,431)




(3,358)




(87,747)




(36,706)


Interest expense


(1,456)




(1,485)




(4,737)




(4,826)


Interest income and other income (expense), net


820




(940)




(2,827)




4,034



Loss before provision for (benefit from) income taxes


(28,067)




(5,783)




(95,311)




(37,498)


Provision for (benefit from) income taxes


1,799




(107)




7,006




2,033



Net loss


$    (29,866)




$      (5,676)




$  (102,317)




$    (39,531)



Net loss per share attributable to common stockholders, basic and diluted


$        (0.15)




$        (0.03)




$        (0.51)




$       (0.20)



Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted


201,393




197,597




200,569




195,996



















Stock-based compensation expense included in costs and expenses
















Cost of revenue—subscription


$      11,665




$       8,095




$      35,272




$     21,652


Cost of revenue—professional services and other


6,767




7,270




18,327




19,250


Sales and marketing


57,925




49,663




166,574




134,720


Research and development


35,506




30,074




108,689




76,811


General and administrative


23,384




14,338




58,314




38,103


Restructuring and other related charges


5,590







5,590




 














































CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)





(in thousands)



October 31, 2022





January 31, 2022



Assets








Current assets








Cash and cash equivalents


$              632,620




$              509,059


Investments—current


342,730




293,763


Accounts receivable, net


422,612




440,950


Contract assets—current


13,609




12,588


Prepaid expenses and other current assets


68,814




63,236


Total current assets


1,480,385




1,319,596


Investments—noncurrent


129,783




94,938


Property and equipment, net


196,127




184,664


Operating lease right-of-use assets


92,155




126,021


Goodwill


352,423




355,058


Intangible assets, net


75,232




98,816


Deferred contract acquisition costs—noncurrent


329,958




311,835


Other assets—noncurrent


75,521




50,337



Total assets


$           2,731,584




$           2,541,265



Liabilities and stockholders’ equity








Current liabilities








Accounts payable


$                47,176




$                52,804


Accrued expenses and other current liabilities


96,227




91,377


Accrued compensation


146,297




160,163


Convertible senior notes—current


36,921





Contract liabilities—current


1,088,197




1,029,891


Operating lease liabilities—current


34,713




37,404


Total current liabilities


1,449,531




1,371,639


Convertible senior notes, net—noncurrent


684,861




718,487


Contract liabilities—noncurrent


15,242




16,725


Operating lease liabilities—noncurrent


81,237




126,340


Deferred tax liability—noncurrent


10,400




9,316


Other liabilities—noncurrent


21,807




23,255


Total liabilities


2,263,078




2,265,762


Stockholders’ equity








Common stock


20




20


Treasury stock


(1,785)




(1,532)


Additional paid-in capital


2,108,062




1,720,013


Accumulated other comprehensive loss


(34,244)




(4,809)


Accumulated deficit


(1,603,547)




(1,438,189)


Total stockholders’ equity


468,506




275,503



Total liabilities and stockholders’ equity


$           2,731,584




$           2,541,265

 
















































CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021



Cash flows from operating activities:
















Net loss


$   (29,866)




$     (5,676)




$ (102,317)




$  (39,531)


Adjustments to reconcile net loss to net cash provided by operating activities
















Depreciation and amortization


21,532




20,166




63,976




61,163


Amortization of deferred contract acquisition and fulfillment costs


44,806




37,283




134,381




100,759


Amortization of debt discount and transaction costs


1,243




1,255




3,725




3,848


Non-cash operating lease costs


7,002




6,527




20,468




20,176


Stock-based compensation expense


140,835




109,441




392,765




290,536


Deferred income taxes


(23)




(1,110)




3,045




(2,360)


Other


5,441




3,159




13,540




5,598


Changes in operating assets and liabilities:
















Accounts receivable


(83,084)




(20,869)




18,338




17,969


Prepaid expenses and other current assets


8,435




(2,523)




(7,593)




(12,890)


Deferred contract acquisition and fulfillment costs


(53,305)




(52,528)




(161,620)




(147,946)


Other assets


(8,452)




(7,434)




(15,707)




(11,290)


Accounts payable


2,948




16,146




(1,739)




6,703


Accrued expenses and other liabilities


(2,094)




(5,136)




873




11,886


Accrued compensation


(1,808)




(9,734)




(15,827)




(22,781)


Contract liabilities


15,010




24,423




56,824




161,047


Operating lease liabilities


(16,083)




(7,979)




(33,430)




(24,212)


Net cash provided by operating activities


52,537




105,411




369,702




418,675



Cash flows from investing activities:
















Cash paid for acquisition, net of acquired cash











(6,388)


Purchases of marketable securities


(105,956)




(117,134)




(402,249)




(302,762)


Sales of marketable securities





68







3,070


Maturities of marketable securities


121,590




79,900




311,769




193,071


Purchases of strategic and other investments


(1,000)




(250)




(3,625)




(750)


Purchases of property and equipment


(16,477)




(15,392)




(53,590)




(43,926)


Net cash used in investing activities


(1,843)




(52,808)




(147,695)




(157,685)



Cash flows from financing activities:
















Repayments of convertible senior notes





(3,121)




(16)




(64,835)


Repurchases of common stock


(38,034)







(63,041)





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


(23,263)




(94,534)




(67,120)




(323,109)


Proceeds from exercise of stock options


383




9,358




11,009




21,176


Proceeds from employee stock purchase plan


12,375




22,910




36,526




46,077


Net cash used in financing activities


(48,539)




(65,387)




(82,642)




(320,691)


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


(6,612)




(1,909)




(14,652)




(2,472)


Net increase (decrease) in cash, cash equivalents and restricted cash


(4,457)




(14,693)




124,713




(62,173)


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


638,849




518,857




509,679




566,336


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


$   634,392




$   504,164




$  634,392




$  504,163





(1) Cash, cash equivalents and restricted cash included restricted cash of $1.8 million and $0.6 million at October 31, 2022 and January 31, 2022.

 






































RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)





Reconciliation of gross profit and gross margin:







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021


GAAP gross profit


$  515,921




$  429,488




$  1,457,677




$  1,191,388


Add: Stock-based compensation


18,432




15,365




53,599




40,902


Add: Amortization of acquisition-related intangibles


2,425




2,766




7,232




9,266


Add: Employer payroll tax on employee stock transactions


471




1,800




1,792




6,695


Add: Lease-related impairment and lease-related charges


413







678





Non-GAAP gross profit


$  537,662




$  449,419




$  1,520,978




$  1,248,251


GAAP gross margin


80 %




79 %




79 %




78 %


Non-GAAP adjustments


3 %




3 %




3 %




4 %


Non-GAAP gross margin


83 %




82 %




82 %




82 %


















GAAP subscription gross profit


$  521,531




$  443,994




$  1,482,886




$  1,226,161


Add: Stock-based compensation


11,665




8,095




35,272




21,652


Add: Amortization of acquisition-related intangibles


2,425




2,766




7,232




9,266


Add: Employer payroll tax on employee stock transactions


310




873




1,150




3,286


Add: Lease-related impairment and lease-related charges


127







321





Non-GAAP subscription gross profit


$  536,058




$  455,728




$  1,526,861




$  1,260,365


GAAP subscription gross margin


84 %




84 %




82 %




83 %


Non-GAAP adjustments


2 %




2 %




3 %




3 %


Non-GAAP subscription gross margin


86 %




86 %




85 %




86 %


















GAAP professional services and other gross loss


$   (5,610)




$ (14,506)




$ (25,209)




$ (34,773)


Add: Stock-based compensation


6,767




7,270




18,327




19,250


Add: Employer payroll tax on employee stock transactions


161




927




642




3,409


Add: Lease-related impairment and lease-related charges


286







357





Non-GAAP professional services and other gross profit (loss)


$     1,604




$   (6,309)




$   (5,883)




$ (12,114)


GAAP professional services and other gross margin


(26) %




(86) %




(44) %




(65) %


Non-GAAP adjustments


33 %




49 %




34 %




42 %


Non-GAAP professional services and other gross margin


7 %




(37) %




(10) %




(23) %

 


































Reconciliation of operating expenses:







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021


GAAP sales and marketing


$  313,783




$  275,619




$  938,062




$  777,110


Less: Stock-based compensation


(57,925)




(49,663)




(166,574)




(134,720)


Less: Amortization of acquisition-related intangibles


(2,688)




(3,205)




(8,522)




(9,896)


Less: Employer payroll tax on employee stock transactions


(1,277)




(5,184)




(5,250)




(17,668)


Less: Lease-related impairment and lease-related charges


(1,467)







(2,353)





Non-GAAP sales and marketing


$  250,426




$  217,567




$  755,363




$  614,826


GAAP sales and marketing as a percentage of revenue


49 %




51 %




51 %




51 %


Non-GAAP sales and marketing as a percentage of revenue


39 %




40 %




41 %




40 %


















GAAP research and development


$  115,934




$  102,603




$  354,693




$  282,670


Less: Stock-based compensation


(35,506)




(30,074)




(108,689)




(76,811)


Less: Employer payroll tax on employee stock transactions


(608)




(2,316)




(3,009)




(9,244)


Less: Lease-related impairment and lease-related charges


(434)







(819)





Non-GAAP research and development


$  79,386




$  70,213




$  242,176




$  196,615


GAAP research and development as a percentage of revenue


18 %




19 %




19 %




19 %


Non-GAAP research and development as a percentage of revenue


12 %




13 %




13 %




13 %


















GAAP general and administrative


$  85,553




$  54,624




$  224,587




$  168,314


Less: Stock-based compensation


(23,384)




(14,338)




(58,314)




(38,103)


Less: Acquisition-related expenses











(387)


Less: Employer payroll tax on employee stock transactions


(180)




(804)




(926)




(4,365)


Less: Executive transition costs


(830)







(2,634)





Less: Lease-related impairment and lease-related charges


(363)







(655)




(3,892)


Non-GAAP general and administrative


$  60,796




$  39,482




$  162,058




$  121,567


GAAP general and administrative as a percentage of revenue


13 %




9 %




12 %




10 %


Non-GAAP general and administrative as a percentage of revenue


9 %




7 %




9 %




8 %

 




















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







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021


GAAP loss from operations


$ (27,431)




$  (3,358)




$ (87,747)




$ (36,706)


Add: Stock-based compensation


135,247




109,440




387,176




290,536


Add: Amortization of acquisition-related intangibles


5,113




5,971




15,754




19,162


Add: Employer payroll tax on employee stock transactions


2,536




10,104




10,977




37,972


Add: Acquisition-related expenses











387


Add: Restructuring and other related charges


28,082







28,082





Add: Executive transition costs


830







2,634





Add: Lease-related impairment and lease-related charges


2,677







4,505




3,892


Non-GAAP income from operations


$  147,054




$  122,157




$  361,381




$  315,243


GAAP operating margin


(4) %




(1) %




(5) %




(2) %


Non-GAAP adjustments


27 %




23 %




24 %




23 %


Non-GAAP operating margin


23 %




22 %




19 %




21 %

 


































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)



2022





2021





2022





2021


GAAP net loss


$   (29,866)




$     (5,676)




$ (102,317)




$   (39,531)


Add: Stock-based compensation


135,247




109,440




387,176




290,536


Add: Amortization of acquisition-related intangibles


5,113




5,971




15,754




19,162


Add: Employer payroll tax on employee stock transactions


2,536




10,104




10,977




37,972


Add: Amortization of debt discount and issuance costs


1,197




1,255




3,679




3,848


Less: Fair value adjustments to strategic investments


45







(384)




(5,270)


Add: Acquisition-related expenses











387


Add: Restructuring and other related charges


28,082







28,082





Add: Executive transition costs


830







2,634





Add: Lease-related impairment and lease-related charges


2,677







4,505




3,892


Add: Income tax effect of non-GAAP adjustments (1)


(27,733)







(64,416)





Non-GAAP net income


$   118,128




$   121,094




$   285,690




$   310,996



















Numerator:
















Non-GAAP net income


$   118,128




$   121,094




$   285,690




$   310,996


Add: Interest expense on convertible senior notes


46




(84)




75




12


Non-GAAP net income attributable to common stockholders, diluted


$   118,174




$   121,010




$   285,765




$   311,008



















Denominator:
















Weighted-average common shares outstanding, basic


201,393




197,597




200,569




195,996


Effect of dilutive securities


4,255




10,508




5,721




12,221


Non-GAAP weighted-average common shares outstanding, diluted


205,648




208,105




206,290




208,217


















GAAP net loss per share, basic and diluted


$       (0.15)




$       (0.03)




$       (0.51)




$       (0.20)


Non-GAAP net income per share, basic


0.59




0.61




1.42




1.59


Non-GAAP net income per share, diluted


0.57




0.58




1.39




1.49





(1) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%. Estimating a non-GAAP tax rate of 20%, the income tax effect of non-GAAP adjustments was $24.3 million for the three months ended October 31, 2021, and $60.6 million for the nine months ended October 31, 2021.

 













Computation of free cash flow:







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021


Net cash provided by operating activities


$     52,537




$   105,411




$   369,702




$   418,675


Less: Purchases of property and equipment


(16,477)




(15,392)




(53,590)




(43,926)


Non-GAAP free cash flow


$     36,060




$     90,019




$   316,112




$   374,749


Net cash used in investing activities


$     (1,843)




$   (52,808)




$ (147,695)




$ (157,685)


Net cash used in financing activities


$   (48,539)




$   (65,387)




$   (82,642)




$ (320,691)

 














Computation of billings:







Three Months Ended
October 31,





Nine Months Ended
October 31,



(in thousands)



2022





2021





2022





2021


Revenue


$   645,463




$   545,463




$  1,856,339




$  1,526,385


Add: Contract liabilities and refund liability, end of period


1,113,131




961,243




1,113,131




961,243


Less: Contract liabilities and refund liability, beginning of period


(1,094,939)




(939,826)




(1,049,106)




(800,940)


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


13,695




18,067




18,273




21,020


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


(17,945)




(19,708)




(17,945)




(19,708)


Non-GAAP billings


$   659,405




$   565,239




$  1,920,692




$  1,688,000

 


Cision View original content to download multimedia:

SOURCE DocuSign, Inc.


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