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DocuSign Announces Third Quarter Fiscal 2024 Financial Results

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DocuSign, Inc. (NASDAQ: DOCU) reported a solid third quarter with total revenue of $700.4 million, 9% year-over-year increase. The company also achieved record non-GAAP operating margin and free cash flow. The CEO highlighted progress in product innovation, go-to-market effectiveness, and operational efficiency, expanding beyond e-signature into intelligent agreement management.
Positive
  • Record non-GAAP operating margin and free cash flow
  • 9% year-over-year increase in total revenue
  • Progress in product innovation, go-to-market effectiveness, and operational efficiency
  • Expansion beyond e-signature into intelligent agreement management
  • Named a Leader in the 2023 Magic Quadrant for Contract Life Cycle Manager report by Gartner, Inc.
  • Opened an engineering center of excellence in India
  • Announced new product capabilities for generating agreements, creating better signing experiences, and managing end-to-end agreements
Negative
  • None.

SAN FRANCISCO, Dec. 7, 2023 /PRNewswire/ -- DocuSign, Inc. (NASDAQ: DOCU), which offers the world's #1 e-signature product as part of its industry leading lineup, today announced results for its fiscal quarter ended October 31, 2023.

"DocuSign had a solid third quarter, delivering record non-GAAP operating margin and free cash flow," said Allan Thygesen, CEO of DocuSign. "We are making progress on product innovation, go-to-market effectiveness, and operational efficiency as we build on our considerable scale and trusted market position and expand beyond e-signature into intelligent agreement management."

Third Quarter Financial Highlights

  • Total revenue was $700.4 million, an increase of 9% year-over-year. Subscription revenue was $682.4 million, an increase of 9% year-over-year. Professional services and other revenue was $18.1 million, a decrease of 16% year-over-year.
  • Billings were $691.8 million, an increase of 5% year-over-year.
  • GAAP gross margin was 80% for both periods. Non-GAAP gross margin was 83% for both periods.
  • GAAP net income per basic share was $0.19 on 204 million shares outstanding compared to a loss of $0.15 on 201 million shares outstanding in the same period last year.
  • GAAP net income per diluted share was $0.19 on 208 million shares outstanding compared to a loss of $0.15 on 201 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.79 on 208 million shares outstanding compared to $0.57 on 206 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $264.2 million compared to $52.5 million in the same period last year.
  • Free cash flow was $240.3 million compared to $36.1 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $1.7 billion at the end of the quarter.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Other Key Metrics."

Operational and Other Financial Highlights:

  • 2023 Gartner Magic Quadrant Leader: For the fourth year in a row, DocuSign was named a Leader in the 2023 Magic Quadrant for Contract Life Cycle Manager report by Gartner, Inc. This year, among the 16 vendors evaluated, DocuSign was one of only five leaders and placed highest on the "ability to execute" axis.
  • DocuSign India: DocuSign announced the opening of our engineering center of excellence in India. With the office opening, we'll be able to recruit top talent and accelerate our ability to deliver critical data-focused product innovation while increasing our global presence.
  • DocuSign 2023 Releases: DocuSign announced new product capabilities for generating agreements, creating better signing experiences and managing end-to-end agreements. Highlights of our recent product release include:
    • DocuSign eSignature and Microsoft Power Pages Integration: Easily integrates DocuSign eSignature into Microsoft's DIY website builder, Power Pages. This integration allows Power Pages makers to give customers a secure way to digitally sign documents without leaving their website—even forms that require multiple steps. Teams in any industry can use this functionality to simplify workflows for common documents that need to be signed (e.g. consent forms, medical agreements, benefits forms, license applications, etc.).
    • Seamlessly Embedded Agreements: An enhancement to Embedded Signing enables users to easily configure the display format so that agreements can seamlessly match the look and feel of websites or applications. Users can also configure different signing methods, including click-to-sign, to eliminate friction points and optimize conversion rates to eliminate potential abandonment of agreements.
    • Agreement Reminders: CLM Essentials customers can now manage their contracts more efficiently. By scheduling custom email agreement reminders, users can avoid missing important contract milestones, like contract expiration, renewal, or follow-up deadlines. Users can customize reminders for each recipient group, such as billing reminders for finance or account check-in reminders for sales.

Outlook

The company currently expects the following guidance:

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

Total revenue

$696

to

$700

Subscription revenue

$679

to

$683

Billings

$758

to

$768

Non-GAAP gross margin

81.0 %

to

82.0 %

Non-GAAP operating margin

22.5 %

to

23.5 %

Non-GAAP diluted weighted-average shares outstanding

207

to

212

 

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

Total revenue

$2,746

to

$2,750

Subscription revenue

$2,670

to

$2,674

Billings

$2,835

to

$2,845

Non-GAAP gross margin

81.5 %

to

82.5 %

Non-GAAP operating margin

24.0 %

to

25.0 %

Non-GAAP diluted weighted-average shares outstanding

207

to

212

 

The company has not reconciled its guidance of non-GAAP financial measures to the corresponding GAAP measures because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation has not been provided.

Webcast Conference Call Information

The company will host a conference call on December 7, 2023 at 2:00 p.m. PT (5:00 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) December 21, 2023 using the passcode 13742533.

About DocuSign

DocuSign redefines how the world comes together and agrees, making agreements smarter, easier and more trusted. As part of its industry leading product lineup, DocuSign offers eSignature, the world's #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, over 1.4 million customers and more than a billion users in over 180 countries use DocuSign products and solutions to accelerate the process of doing business and simplify people's lives. For more information visit http://www.docusign.com.

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

Investor Relations:
DocuSign Investor Relations
investors@docusign.com

Media Relations:
DocuSign Corporate Communications
media@docusign.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, objectives for future operations, and the impact of such assumptions on our financial condition and results of operations are forward-looking statements. Forward-looking statements in this press release also include, among other things, statements under "Outlook" above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as our anticipated future products and product strategies, as well as statements related to our expectations regarding customer acceptance of those products. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

Forward-looking statements contained in this press release include, but are not limited to, statements about: our expectations regarding global macro-economic conditions, including the effects of inflation, rising and fluctuating interest rates, instability in the global banking sector, and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market; our ability to compete effectively in an evolving and competitive market; the impact of any data breaches, cyberattacks or other malicious activity on our technology systems; our ability to effectively sustain and manage our growth and future expenses and achieve and maintain future profitability; our ability to attract new customers and maintain and expand our existing customer base; our ability to effectively implement and execute our restructuring plans; our ability to scale and update our platform to respond to customers' needs and rapid technological change, including our ability to successfully incorporate generative artificial intelligence into our existing and future products; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to retain our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions and to successfully integrate and realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility or other indebtedness; our ability to realize the anticipated benefits of our stock repurchase program; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel, including executive level management; our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts; our ability to successfully implement and maintain new and existing information technology systems, including our ERP system; and our ability to maintain proper and effective internal controls.

Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended January 31, 2023 filed on March 27, 2023, our quarterly report on Form 10-Q for the quarter ended October 31, 2023, which we expect to file on December 8, 2023 with the Securities and Exchange Commission (the "SEC"), and other filings that we make from time to time with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this press release or to conform such statements to actual results or revised expectations, except as required by law.

Non-GAAP Financial Measures and Other Key Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We present these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, these non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges, as these costs are not reflective of ongoing operations and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023 and fiscal 2024, we have determined the projected non-GAAP tax rate to be 20%.

Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings is a key metric to measure our periodic performance. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

 

DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands, except per share data)

2023


2022


2023


2022

Revenue:








Subscription

$    682,352


$    624,055


$ 1,991,026


$ 1,798,500

Professional services and other

18,069


21,408


58,470


57,839

Total revenue

700,421


645,463


2,049,496


1,856,339

Cost of revenue:








Subscription

114,227


102,524


339,354


315,614

Professional services and other

28,418


27,018


85,360


83,048

Total cost of revenue

142,645


129,542


424,714


398,662

Gross profit

557,776


515,921


1,624,782


1,457,677

Operating expenses:








Sales and marketing

292,473


313,783


867,916


938,062

Research and development

136,640


115,934


387,964


354,693

General and administrative

108,215


85,553


316,910


224,587

Restructuring and other related charges

710


28,082


30,293


28,082

Total operating expenses

538,038


543,352


1,603,083


1,545,424

Income (loss) from operations

19,738


(27,431)


21,699


(87,747)

Interest expense

(1,577)


(1,456)


(5,135)


(4,737)

Interest income and other income (expense), net

17,673


820


47,373


(2,827)

Income (loss) before provision for (benefit from) income taxes

35,834


(28,067)


63,937


(95,311)

Provision for (benefit from) income taxes

(2,971)


1,799


17,198


7,006

Net income (loss)

$      38,805


$    (29,866)


$      46,739


$  (102,317)

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





Basic

$          0.19


$         (0.15)


$          0.23


$        (0.51)

Diluted

$          0.19


$         (0.15)


$          0.23


$        (0.51)

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





Basic

204,456


201,393


203,609


200,569

Diluted

208,054


201,393


208,317


200,569









Stock-based compensation expense included in costs and expenses:





Cost of revenue—subscription

$      13,705


$      11,665


$      38,143


$      35,272

Cost of revenue—professional services and other

7,343


6,767


21,359


18,327

Sales and marketing

53,715


57,925


150,604


166,574

Research and development

48,310


35,506


129,458


108,689

General and administrative

36,337


23,384


111,271


58,314

Restructuring and other related charges

8


5,590


4,996


5,590

 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 


(in thousands)

October 31, 2023


January 31, 2023

Assets




Current assets




Cash and cash equivalents

$           1,188,578


$              721,895

Investments—current

401,639


309,771

Accounts receivable, net

360,456


516,914

Contract assets—current

19,381


12,437

Prepaid expenses and other current assets

72,629


69,987

Total current assets

2,042,683


1,631,004

Investments—noncurrent

55,448


186,049

Property and equipment, net

230,963


199,892

Operating lease right-of-use assets

126,198


141,493

Goodwill

351,493


353,619

Intangible assets, net

55,605


70,280

Deferred contract acquisition costs—noncurrent

383,205


350,899

Other assets—noncurrent

92,032


79,484

Total assets

$           3,337,627


$           3,012,720

Liabilities and Equity




Current liabilities




Accounts payable

$                14,787


$                24,393

Accrued expenses and other current liabilities

99,642


100,987

Accrued compensation

159,381


163,133

Convertible senior notes—current

689,111


722,887

Contract liabilities—current

1,204,599


1,172,867

Operating lease liabilities—current

21,701


24,055

Total current liabilities

2,189,221


2,208,322

Contract liabilities—noncurrent

22,069


16,925

Operating lease liabilities—noncurrent

124,551


141,348

Deferred tax liability—noncurrent

17,160


10,723

Other liabilities—noncurrent

19,593


18,115

Total liabilities

2,372,594


2,395,433

Stockholders' equity




Common stock

20


20

Treasury stock

(2,164)


(1,785)

Additional paid-in capital

2,693,124


2,240,732

Accumulated other comprehensive loss

(28,487)


(22,996)

Accumulated deficit

(1,697,460)


(1,598,684)

Total stockholders' equity

965,033


617,287

Total liabilities and equity

$           3,337,627


$           3,012,720

 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

Cash flows from operating activities:








Net income (loss)

$     38,805


$   (29,866)


$     46,739


$ (102,317)

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








Depreciation and amortization

23,324


21,532


71,429


63,976

Amortization of deferred contract acquisition and fulfillment costs

49,399


44,806


147,781


134,381

Amortization of debt discount and transaction costs

1,227


1,243


3,722


3,725

Non-cash operating lease costs

4,768


7,002


16,499


20,468

Stock-based compensation expense

159,418


140,835


455,831


392,765

Deferred income taxes

3,845


(23)


7,265


3,045

Other

(571)


5,441


(1,353)


13,540

Changes in operating assets and liabilities:








Accounts receivable

53,099


(83,084)


152,902


18,338

Prepaid expenses and other current assets

6,463


8,435


(7,957)


(7,593)

Deferred contract acquisition and fulfillment costs

(63,154)


(53,305)


(176,510)


(161,620)

Other assets

(5,586)


(8,452)


(14,019)


(15,707)

Accounts payable

11,205


2,948


(9,089)


(1,739)

Accrued expenses and other liabilities

(7,792)


(2,094)


2,372


873

Accrued compensation

(1,056)


(1,808)


(4,368)


(15,827)

Contract liabilities

(3,582)


15,010


36,876


56,824

Operating lease liabilities

(5,635)


(16,083)


(19,292)


(33,430)

Net cash provided by operating activities

264,177


52,537


708,828


369,702

Cash flows from investing activities:








Purchases of marketable securities

(28,974)


(105,956)


(203,346)


(402,249)

Maturities of marketable securities

87,500


121,590


251,517


311,769

Purchases of strategic and other investments

(400)


(1,000)


(520)


(3,625)

Purchases of property and equipment

(23,841)


(16,477)


(70,277)


(53,590)

Net cash provided by (used in) investing activities

34,285


(1,843)


(22,626)


(147,695)

Cash flows from financing activities:








Repayments of convertible senior notes

(37,083)



(37,083)


(16)

Repurchases of common stock

(75,035)


(38,034)


(145,515)


(63,041)

Settlement of capped calls, net of related costs



23,688


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

(35,615)


(23,263)


(98,296)


(67,120)

Proceeds from exercise of stock options

12,375


383


13,207


11,009

Proceeds from employee stock purchase plan

14,604


12,375


32,994


36,526

Net cash used in financing activities

(120,754)


(48,539)


(211,005)


(82,642)

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

(7,187)


(6,612)


(4,897)


(14,652)

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

170,521


(4,457)


470,300


124,713

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

1,022,980


638,849


723,201


509,679

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

$  1,193,501


$   634,392


$  1,193,501


$   634,392

(1) Cash, cash equivalents and restricted cash included restricted cash of $4.9 million and $1.3 million at October 31, 2023 and January 31, 2023.

 

DOCUSIGN, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)


Reconciliation of gross profit (loss) and gross margin:


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

GAAP gross profit

$   557,776


$   515,921


$  1,624,782


$  1,457,677

Add: Stock-based compensation

21,048


18,432


59,502


53,599

Add: Amortization of acquisition-related intangibles

2,070


2,425


6,787


7,232

Add: Employer payroll tax on employee stock transactions

537


471


1,925


1,792

Add: Lease-related impairment and lease-related charges


413


721


678

Non-GAAP gross profit

$   581,431


$   537,662


$  1,693,717


$  1,520,978

GAAP gross margin

80 %


80 %


79 %


79 %

Non-GAAP adjustments

3 %


3 %


4 %


3 %

Non-GAAP gross margin

83 %


83 %


83 %


82 %









GAAP subscription gross profit

$   568,125


$   521,531


$  1,651,672


$  1,482,886

Add: Stock-based compensation

13,705


11,665


38,143


35,272

Add: Amortization of acquisition-related intangibles

2,070


2,425


6,787


7,232

Add: Employer payroll tax on employee stock transactions

301


310


1,232


1,150

Add: Lease-related impairment and lease-related charges


127


505


321

Non-GAAP subscription gross profit

$   584,201


$   536,058


$  1,698,339


$  1,526,861

GAAP subscription gross margin

83 %


84 %


83 %


82 %

Non-GAAP adjustments

3 %


2 %


2 %


3 %

Non-GAAP subscription gross margin

86 %


86 %


85 %


85 %









GAAP professional services and other gross loss

$  (10,349)


$    (5,610)


$  (26,890)


$  (25,209)

Add: Stock-based compensation

7,343


6,767


21,359


18,327

Add: Employer payroll tax on employee stock transactions

236


161


693


642

Add: Lease-related impairment and lease-related charges


286


216


357

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

$    (2,770)


$      1,604


$    (4,622)


$    (5,883)

GAAP professional services and other gross margin

(57) %


(26) %


(46) %


(44) %

Non-GAAP adjustments

42 %


33 %


38 %


34 %

Non-GAAP professional services and other gross margin

(15) %


7 %


(8) %


(10) %

 

Reconciliation of operating expenses:


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

GAAP sales and marketing

$ 292,473


$ 313,783


$ 867,916


$ 938,062

Less: Stock-based compensation

(53,715)


(57,925)


(150,604)


(166,574)

Less: Amortization of acquisition-related intangibles

(2,629)


(2,688)


(7,888)


(8,522)

Less: Employer payroll tax on employee stock transactions

(875)


(1,277)


(3,945)


(5,250)

Less: Lease-related impairment and lease-related charges


(1,467)


(2,171)


(2,353)

Non-GAAP sales and marketing

$ 235,254


$ 250,426


$ 703,308


$ 755,363

GAAP sales and marketing as a percentage of revenue

42 %


49 %


42 %


51 %

Non-GAAP sales and marketing as a percentage of revenue

34 %


39 %


34 %


41 %









GAAP research and development

$ 136,640


$ 115,934


$ 387,964


$ 354,693

Less: Stock-based compensation

(48,310)


(35,506)


(129,458)


(108,689)

Less: Employer payroll tax on employee stock transactions

(876)


(608)


(3,671)


(3,009)

Less: Lease-related impairment and lease-related charges


(434)


(873)


(819)

Non-GAAP research and development

$   87,454


$   79,386


$ 253,962


$ 242,176

GAAP research and development as a percentage of revenue

20 %


18 %


19 %


19 %

Non-GAAP research and development as a percentage of revenue

12 %


12 %


12 %


13 %









GAAP general and administrative

$ 108,215


$   85,553


$ 316,910


$ 224,587

Less: Stock-based compensation

(36,337)


(23,384)


(111,271)


(58,314)

Less: Employer payroll tax on employee stock transactions

(564)


(180)


(1,541)


(926)

Less: Executive transition costs


(830)



(2,634)

Less: Lease-related impairment and lease-related charges


(363)


(695)


(655)

Non-GAAP general and administrative

$   71,314


$   60,796


$ 203,403


$ 162,058

GAAP general and administrative as a percentage of revenue

15 %


13 %


15 %


12 %

Non-GAAP general and administrative as a percentage of revenue

10 %


9 %


10 %


9 %

 

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


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

GAAP income (loss) from operations

$   19,738


$ (27,431)


$   21,699


$ (87,747)

Add: Stock-based compensation

159,410


135,247


450,835


387,176

Add: Amortization of acquisition-related intangibles

4,699


5,113


14,675


15,754

Add: Employer payroll tax on employee stock transactions

2,852


2,536


11,082


10,977

Add: Restructuring and other related charges

710


28,082


30,293


28,082

Add: Executive transition costs


830



2,634

Add: Lease-related impairment and lease-related charges


2,677


4,460


4,505

Non-GAAP income from operations

$ 187,409


$ 147,054


$ 533,044


$ 361,381

GAAP operating margin

3 %


(4) %


1 %


(5) %

Non-GAAP adjustments

24 %


27 %


25 %


24 %

Non-GAAP operating margin

27 %


23 %


26 %


19 %

 

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


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands, except per share data)

2023


2022


2023


2022

GAAP net income (loss)

$      38,805


$    (29,866)


$      46,739


$  (102,317)

Add: Stock-based compensation

159,410


135,247


450,835


387,176

Add: Amortization of acquisition-related intangibles

4,699


5,113


14,675


15,754

Add: Employer payroll tax on employee stock transactions

2,852


2,536


11,082


10,977

Add: Amortization of debt discount and issuance costs

1,250


1,197


4,149


3,679

Add: Fair value adjustments to strategic investments


45


119


(384)

Add: Restructuring and other related charges

710


28,082


30,293


28,082

Add: Executive transition costs


830



2,634

Add: Lease-related impairment and lease-related charges


2,677


4,460


4,505

Add: Income tax effect of non-GAAP adjustments

(43,922)


(27,733)


(98,712)


(64,416)

Non-GAAP net income

$    163,804


$    118,128


$    463,640


$    285,690









Numerator:








Non-GAAP net income

$    163,804


$    118,128


$    463,640


$    285,690

Add: Interest expense on convertible senior notes

22


46


425


75

Non-GAAP net income attributable to common stockholders, diluted

$    163,826


$    118,174


$    464,065


$    285,765









Denominator:








Weighted-average common shares outstanding, basic

204,456


201,393


203,609


200,569

Effect of dilutive securities

3,598


4,255


4,708


5,721

Non-GAAP weighted-average common shares outstanding, diluted

208,054


205,648


208,317


206,290









GAAP net income (loss) per share, basic

$         0.19


$        (0.15)


$         0.23


$        (0.51)

GAAP net income (loss) per share, diluted

$         0.19


$        (0.15)


$         0.23


$        (0.51)

Non-GAAP net income per share, basic

0.80


0.59


$         2.28


$         1.42

Non-GAAP net income per share, diluted

0.79


0.57


$         2.23


$         1.39

 

Computation of free cash flow:


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

Net cash provided by operating activities

$    264,177


$      52,537


$    708,828


$    369,702

Less: Purchases of property and equipment

(23,841)


(16,477)


(70,277)


(53,590)

Non-GAAP free cash flow

$    240,336


$      36,060


$    638,551


$     316,112

Net cash provided by (used in) investing activities

$      34,285


$       (1,843)


$     (22,626)


$   (147,695)

Net cash used in financing activities

$   (120,754)


$     (48,539)


$   (211,005)


$     (82,642)

 

Computation of billings:


Three Months Ended October 31,


Nine Months Ended October 31,

(in thousands)

2023


2022


2023


2022

Revenue

$    700,421


$    645,463


$ 2,049,496


$ 1,856,339

Add: Contract liabilities and refund liability, end of period

1,228,174


1,113,131


1,228,174


1,113,131

Less: Contract liabilities and refund liability, beginning of period

(1,233,894)


(1,094,939)


(1,191,269)


(1,049,106)

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

22,358


13,695


16,615


18,273

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

(25,253)


(17,945)


(25,253)


(17,945)

Non-GAAP billings

$    691,806


$    659,405


$ 2,077,763


$ 1,920,692

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/docusign-announces-third-quarter-fiscal-2024-financial-results-302009384.html

SOURCE DocuSign, Inc.

FAQ

What are DocuSign, Inc.'s financial results for the fiscal quarter ended October 31, 2023?

DocuSign reported total revenue of $700.4 million, a 9% year-over-year increase, and record non-GAAP operating margin and free cash flow.

What were the highlights of DocuSign, Inc.'s third quarter financial results?

The highlights included total revenue of $700.4 million, 9% year-over-year increase, and a record non-GAAP operating margin and free cash flow.

What guidance did DocuSign, Inc. provide for the upcoming quarter ending January 31, 2024?

DocuSign expects total revenue of $696 to $700 million, subscription revenue of $679 to $683 million, and billings of $758 to $768 million for the quarter ending January 31, 2024.

What new product capabilities did DocuSign, Inc. announce for generating agreements and creating better signing experiences?

DocuSign announced new product capabilities for generating agreements, creating better signing experiences, and managing end-to-end agreements, including integration with Microsoft Power Pages and enhanced embedded signing.

What recognition did DocuSign, Inc. receive in the 2023 Magic Quadrant for Contract Life Cycle Manager report by Gartner, Inc.?

DocuSign was named a Leader in the 2023 Magic Quadrant for Contract Life Cycle Manager report by Gartner, Inc., for the fourth year in a row.

DocuSign, Inc.

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