Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Fourth Quarter and Full Year Fiscal Year '22 Earnings Conference Call. As a reminder, this call is being recorded and will be available for replay from the Investor Relations section of the website following the call. And I will now pass the call over to Roger Martin, Vice President of Finance. Please go ahead.

Good afternoon, and welcome to the DocuSign Q4 2020 Earnings Call. I'm Roger Martin, DocuSign's VP of Finance. Joining me on the call today are DocuSign's CEO, Dan Springer; and our CFO, Cynthia Gaylor. The press release announcing our fourth-quarter results was issued earlier today and is posted on our Investor Relations website. Now let me remind everyone that some of our statements on today's call are forward-looking. We believe our assumptions and expectations related to these forward-looking statements are reasonable, but they are subject to known and unknown risks and uncertainties that may cause our actual results or performance to be materially different. In particular, our expectations regarding the pace of digital transformation and factors affecting customer demand, including as a result of the pandemic, are based on our best estimates at this time and are, therefore, subject to change. Please read and consider the risk factors in our filings with the SEC, together with the content of this call. Any forward-looking statements are based on our assumptions and expectations to date. And except as required by law, we assume no obligation to update these statements in light of future events or new information. During this call, we will present GAAP and non-GAAP financial measures. Non-GAAP financial measures exclude stock-based compensation expenses, employer payroll tax on employee stock transactions, amortization of acquired intangible assets, amortization of debt discount and issuance costs from our notes, acquisition-related expenses, fair value adjustments to strategic investments, impairment of lease-related assets and, as applicable, other special items. In addition, we provide non-GAAP weighted average share count and information regarding free cash flows and billings. These non-GAAP measures are not intended to be considered in isolation from, as substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing our performance. For information regarding our non-GAAP financial information, the most directly comparable GAAP measures and the quantitative reconciliation of these figures, please refer to today's earnings press release, which can be found on our website at investor.docusign.com. I'd like to turn the call over to Dan Springer. Dan?

Thank you, Roger. Good afternoon, everyone. We have a lot to share with you today as we'll cover our performance for the quarter and for the entire fiscal year. We'll talk in more detail about some important sales wins and recent innovations that continue to bring our vision for the Agreement Cloud to life. Finally, we'll look ahead to our focus areas for fiscal '23. I'd like to start by sharing a few observations about the quarter. Q4 total revenue grew 35% year-over-year to $581 million with an 18% non-GAAP operating margin. Billings grew 25% year-over-year in the quarter. International revenue grew 55% year-over-year. We added nearly 60,000 new customers in the quarter, and that's a 31% increase year-over-year. And we continue to see strong net dollar retention of 119% in Q4, which is at the high end of our historical range. Looking at the year, we grew revenue 45% to over $2 billion and billings by 37% to over $2.35 billion. We added more than 280,000 new customers, ending the year with over 1.17 million customers in total. These results reflect our team's unwavering dedication amid the macro challenges and the needed shifts in our business coming out of COVID. They also showcased continued tailwinds for the digitization of agreement workflows for businesses of every shape and size. We recognize, of course, that fiscal year '22 had two distinct chapters that contribute to our growth story. During the peak of the pandemic, urgent need drove dramatic acceleration of purchases, and our sales focus was squarely set on meeting that elevated demand. This motion carried through the first half of fiscal year '22. In the second half of the year, there were more challenging macro conditions impacting our customers' priorities. We saw a diminished level of urgency in their buying patterns. Customers turned their focus to investments and projects that were delayed during the heart of the pandemic. As we saw urgent demand wane, we have just begun to shift in our sales motion, back to a demand generation mode of cross-sell, upsell and departmental expansion. While we excel at demand generation for many years pre-COVID, ultimately, the shift in customer buying patterns coming out of the pandemic was quicker than we anticipated, and we didn't move fast enough as an organization. Our move from capturing high volumes of customer demand to reverting back to generating demand is now well underway. We expect this work will continue through fiscal year 2023 as we make tangible progress moving through the year. At over $2 billion in annual revenue, we believe we're still very early in the first 10% of the $50 billion Agreement Cloud market opportunity. Digital transformation remains a high priority for businesses at every scale in every industry. Given our strong brand, a leading market position and product differentiation, DocuSign is uniquely positioned to lead and capture that market opportunity with eSignature and the broader Agreement Cloud. As the pandemic subsides and people begin to return to the office, they are not returning to paper. eSignature is clearly here to stay, and the movement toward the broader Agreement Cloud will only continue to gain prominence. We are confident we have massive market space to grow. When we think about the opportunity this year presents, it falls into two main buckets: the ways we're helping our customers succeed on our platform; and the innovation we're bringing to market. Last quarter, we doubled down on our global go-to-market methodology and began driving our field organization to focus on expanding opportunities. As our customers scale their usage across departments and new use cases, our field approach is also evolving. To that end, we've been bolstering our field leadership with strong leaders with General Managers in EMEA, APJ and LATAM, along with recent additions across North America in the commercial and SMB segments. And we're very close to finalizing a new North American enterprise sales leader as well. Importantly, we've begun a search for an executive to lead the global field organization at success and sales. This supports our goal of scaling our business to $5 billion and beyond. As part of this change, once we have secured and onboarded our new leader, Loren will transition from DocuSign. Now it's hard to think of a sales executive as having more impact on a company than Loren has had here in his 14 years, from director to North American leader to CRO. He has really built the sales organization here. And as noted above, he's leading the way as we expand the sales leadership team for our next level of scale. He'll be staying with the company this year, and he remains focused on delivering for our customers and driving our growth. Loren will be a big part of helping us to transition to the new sales and success leader in the coming months. We're already encouraged by the results we're seeing from these efforts, as we are upselling eSignature to more departments and use cases, cross-selling our key add-ons like identity verification, notary and monitor as well as cross-selling our CLM products. For example, last quarter, we expanded our relationship with one of the world's largest insurance and financial services companies, implementing new use cases for remote online notary for affidavit, citizenship verification and claims recovery; and DocuSign Verify for loans and cash-out statements. By deepening their adoption of the DocuSign Agreement Cloud, they shared that the efficiency gained by their employees and independent agents enabled them to realize tremendous savings in both time and operational expense, all while improving the self-service customer experience and maintaining strict regulatory compliance. We're hearing the same story across our key verticals with new customers as well. Last quarter, one of the largest pharmacy chains in the U.S. adopted eSignature and our AI-powered CLM products as part of their ongoing digital transformation initiative. The Agreement Cloud was the answer to replacing the manual processes across their agreement systems, which were described to us as painful and time-consuming. From that initial order, we're now seeing 75 different use cases across departments and an opportunity to deliver nearly 10 million envelopes annually. Around the world, DocuSign's value proposition is just as strong. Last quarter, for example, we welcomed Westpac New Zealand, part of Australia's Westpac Group, to the Agreement Cloud. Like so many customers who start with DocuSign eSignature, our exceptional employee and customer experience opens the door to more use cases. For Westpac New Zealand, this led to the adoption of CLM, Gen plus Send and a significant API integration, all within the first year of our relationship. The second big opportunity this fiscal year is our continued innovation to drive stickiness and deepen our roots as a multiproduct company. More users are engaging with DocuSign every day as we work to make it even easier for them to adopt more of the advanced capabilities of the Agreement Cloud, eliminating paper, automating manual processes and connecting customers to the other systems they already use. A great example is the new DocuSign eSignature app for Zoom that enables organizations to reimagine their customer agreement process with virtual face-to-face signing experiences that our customers' customers really love. Through this new partnership, our customers can now securely share, review and complete agreements right from Zoom. In the next few weeks, we'll launch a new eSignature capability called Joint Agreements for businesses with a network model. Joint Agreements allows for a single customer experience with co-management of agreements between multiple parties behind the scenes. This makes things easier for every party involved. We believe Joint Agreements will inspire large financial services firms to encourage the use of DocuSign by their networks, which often number in the tens of thousands of advisers or agents. Next month, we're also planning to launch an important new feature called Delayed Routing for DocuSign eSignature. This allows users to add timing delays during the routing process of an envelope. This fine-tuning of the agreement process has become an increasingly popular customer ask, especially for situations where regulations require a delay like some franchising agreements that require a one-week delay for a review before they can be signed. In total, fiscal '22 results were very strong, and I'm proud of how we as a team are moving to adapt and recalibrate to address the rapidly shifting market dynamics that we're facing post-COVID. Despite the temporal headwinds, we're continuing to focus on winning both new customers and existing customer expansions and on driving continued innovation. As a clear market leader, we've got long-term momentum on our side, a vision that's unchanged and a massive total addressable market. The changes we're making to our go-to-market strategy will, indeed, take a few quarters to play out. But we believe we're still just scratching the surface of our long-term opportunity and are better positioned than ever for future success. Before handing it over to Cynthia to walk you through our Q4 results and the fiscal year '23 outlook in more detail, I want to take a moment to thank the DocuSign team and our customers. Together, you're inspiring us to continue pioneering. Just this week, DocuSign was named one of Fast Company's top 10 Most Innovative Enterprise Companies. It's great to see others recognize our work, but more importantly, it's a true testament to our hardworking team and the positive impact our customers are helping us make on the world. With that, Cynthia, over to you.

Thanks, Dan, and good afternoon, everyone. Overall, we had a solid finish to the year. While fiscal '22 unfolded differently than we initially anticipated with the first half stronger than expected and the back half slowing faster than anticipated, net-net, we achieved most of our financial and operating goals for the year. We scaled to become a multibillion-dollar business and achieved record cash flow and operating margins, successfully balancing growth and profitability. We continue to build out our Agreement Cloud portfolio with the addition of multiple new products and capabilities to further digitize agreement workflows, and we helped 280,000 new customers begin their digital journey. With that, let me turn to the Q4 and fiscal 2022 results. For the fourth quarter, total revenue increased 35% year-over-year to $581 million and subscription revenue grew 37% year-over-year to $564 million. For the full year, total revenue reached $2.1 billion, an increase of 45% over last year and subscription revenue hit $2 billion, an increase of 47%. Our international revenue continued to outpace our domestic growth at 55% year-over-year to $138 million in the fourth quarter, contributing 24% of total revenue. For the full year, international revenue grew over 68% to $481 million, representing 23% of our total revenue and reflecting our accelerated expansion across geographies. Fourth quarter billings rose 25% year-over-year to $670 million, leading to a four-quarter rolling average of 37%. For the full year, billings increased 37% to $2.4 billion. With the addition of nearly 60,000 new customers in the fourth quarter, our total installed base grew 31% for the full year with over 1.17 million customers worldwide. We added 10,000 new direct customers in Q4 and 45,000 for the year, a 36% increase year-over-year, bringing our total to 170,000 direct customers. Customers with an annual spend greater than $300,000 grew 42% year-over-year in the fourth quarter to 852 customers. We achieved 119% dollar net retention for the quarter, at the high end of our historic range. Non-GAAP gross margin for the fourth quarter was 81% compared with 80% a year ago. For the full year, gross margin was 82% compared to 79% a year ago. Fourth quarter subscription gross margin was 85%, consistent with last year. For the full year, subscription gross margin was 85% versus 84% a year ago. Q4 non-GAAP operating profit reached $104 million compared with $75 million last year. Non-GAAP operating margin was 18% compared to 17% last year. For the full year, non-GAAP operating profit rose 132% to $419 million, and operating margin was 20% versus 12% in fiscal '21. Non-GAAP net income for Q4 was $100 million compared with $77 million in the fourth quarter of last year. For the full year, net income was $411 million, up from $182 million in fiscal '21, a growth rate of 125% year-over-year. We ended the quarter with 7,461 employees, an increase of 33% over last year. We exited the year with $898 million in cash, cash equivalents, restricted cash and investments. Operating cash flow in the fourth quarter grew 41% year-over-year to $88 million or a 15% margin. This compares with $62 million or 14% in the same quarter a year ago. Free cash flow for the quarter was $70 million or 12% margin compared to $44 million or 10% in the prior year, a 60% increase year-over-year. For the full year, operating cash flow grew 71% to $506 million or a 24% margin compared to $297 million or 20% a year ago. And free cash flow more than doubled, growing at 107% year-over-year to $445 million or 21% margin compared to $215 million or 15% margin in fiscal '21. Additionally, we continue to invest for the health of our planet through our sustainability initiatives. Our products have helped save over 55 billion sheets of paper and 6 million trees so far, and we achieved carbon-neutral status this year. We are continuing our efforts to reach net-zero emissions no later than 2050 as part of the business ambition pledge by committing to setting science-based targets aligned with a 1.5-degree Celsius trajectory for a net-zero future. Let me now turn to our guidance. As Dan mentioned, early in fiscal '22, we continue to benefit from macro tailwinds with strong residual customer demand. Today, while we see the lingering effects tapering from the heightened demand we saw a year ago, we expect to see a slower start to fiscal 2023 while we progress our go-to-market initiatives over the next few quarters. As we gain traction and execute against our strategy, we continue to win new customers and support existing customer success and expansion. We expect to see the related growth contribution picking up as we move through the year. We have worked diligently to incorporate the above factors into our current outlook. With that, let's turn to guidance. Total revenue of $579 million to $583 million in Q1 or growth of 24% year-over-year and $2.47 billion to $2.48 billion for fiscal '23 or growth of 17% to 18% year-over-year. Of this, we expect subscription revenue of $562 million to $566 million in Q1 or a growth of 24% to 25% year-over-year and $2.39 billion to $2.41 billion for fiscal '23 or a growth of 18% year-over-year. For billings, we expect $573 million to $583 million in Q1 or growth of 9% to 11% year-over-year and $2.71 billion to $2.73 billion for fiscal '23 or growth of 15% to 16% year-over-year. We expect non-GAAP gross margin to be 79% to 81% for both Q1 and fiscal '23. We expect non-GAAP operating margin to be 16% to 18% for both Q1 and fiscal '23. We expect to see a de minimis amount of interest and other income, including undrawn revolver fees related to our credit facility. For fiscal '23, we expect a tax provision of approximately $4 million to $8 million. We expect fully diluted weighted average shares outstanding of 205 million to 210 million for both Q1 and fiscal '23. Additionally, our Board authorized a $200 million open market share repurchase program. This program underscores our confidence in the strong fundamentals of our business and allows us to flexibly leverage our balance sheet to efficiently deliver returns to our shareholders. Our primary focus will continue to be investing for long-term growth, particularly in sales capacity and enablement, marketing, product innovation and the scaling of our operations, as we are still in the early stages of this large and growing market opportunity. Before turning to Q&A, we would like to thank the DocuSign team, our customers and our partners for their tremendous efforts during last year's unprecedented journey. We're driving the next phase of our strategy to better enable our teams to help customers digitize their agreement processes and fully capture the potential of the $50 billion Agreement Cloud market. In the near term, while we ramp and strengthen our demand-gen motion, we are confident in the opportunity that lies ahead for the Agreement Cloud and are encouraged about the broader market opportunity we're seeing on the horizon. We remain focused on delivering solid results for our shareholders. With that, thanks for joining us today. We look forward to seeing you at the customer and user conference Momentum in a few weeks on April 4 and 5. And we will now open up the call for questions.

Our first question comes from Tyler Radke from Citi.

I wanted to first start about the go-to-market changes that you're making. Obviously, some new kind of sales leadership moving around. Maybe if you could help us unpack kind of the relative size of these changes and how they compare relative to your initial expectations last quarter. And then how are you just thinking about the timing for when demand starts to rebound? Is this a Q3, Q4 event? How are you building that into your forecast?

Yes. At a high level, there are significant changes to our go-to-market organization, including bringing in a new leader for success and sales, which constitutes 60% to 65% of our company. From a headcount perspective, this is quite substantial. Additionally, we have nearly completed a total overhaul of our sales leadership in North America. We have new leaders in North America from prominent companies like Oracle and Salesforce.com overseeing the SMB and commercial segments, and we are close to finalizing a new leader for the enterprise segment. North America has faced the biggest challenges, which we discussed regarding headwinds at the end of last year, and that is where our focus is directed. Since I joined the company five years ago, we haven't seen changes of this magnitude in our go-to-market team. Regarding the timing, I cannot specify which quarter will reflect the impact of these changes. Cynthia has provided guidance indicating that significant alterations to the business are necessary, and our goal is to implement these changes as swiftly as we can to return to the long-term growth rates we are confident we can achieve.

Great. And second question, you talked about seeing some CLM deals and that being a focus for some of the upsell motion. Can you just talk about how CLM is performing relative to your expectations? And do these go-to-market changes help to elevate CLM more? Just help us understand how you're thinking about that relative to the core eSignature.

Yes. Absolutely. In fact, we didn't go into too much detail. But what we've done, as you think about what we said last quarter, we realized we really needed to get our field focusing. And for us, field is, again, not just their sales team, but it's also the success team that is so critical to driving the adoption that we get and then the consumption, which leads to that future growth, to get them focused on our core eSignature and eSignature Plus products. And we are hugely excited about but also focused on that execution. So part of the challenge as we were onboarding AEs and other field personnel throughout last year, we were asking them to be really able to sell the entire DocuSign Agreement Cloud. We wanted them to sort of put more things in the bag, if you will. I think what we realized was it was defocusing folks from the core eSignature business. So we've pulled out a dedicated CLM team. And the purpose is both to address your question, hey, do we get enough focus on training sellers to really be competitive to win in what is a competitive market there? It's different than the leadership position we have in eSignature. But also, it frees up our traditional field to focus on the eSignature and eSignature Plus opportunity, which is critical to our overall Agreement Cloud success. So those are the changes we made. We think those are substantial change, and we think that should be significant to help us, again, drive focus on both areas of growth.

Our next question comes from the line of Sterling Auty with JPMorgan.

Can you characterize what the sales pipeline looked like at the end of the quarter versus what it looked like coming into the quarter?

So I mean, we don't have sort of a pipeline metric that we would sort of disclose or share. But I can tell you from a standpoint that we build pipeline in two different ways in terms of two different time frames. So right now, we are building pipeline focused on Q2 as a primary goal. But if you get down to our SMB and the sort of the bottom half of the commercial business, quite a bit of the pipeline that we generate actually can close in quarter. So I think what we're seeing right now is a significant increase in our achievement of our pipeline goals today than where we were a quarter ago. But again, some of those things were for this quarter, and some would be for the quarter ahead.

Understood. And then one follow-up. Can you give us a sense of what the net dollar retention expectation is that's kind of built into the guidance that you gave?

Yes. So I would think Q4, we landed at the 119%, which was at the high end of our historic range. For Q1, we would expect to be within the range between the 112% and 119%. That has been our historic range. But it's not, Sterling, as you know, a metric that we've traditionally guided to, though we have tried to give color about what we're seeing there.

Our next question comes from the line of Rishi Jaluria with RBC.

First, I wanted to discuss the billings guidance for next year. It suggests a potential acceleration, possibly more significant depending on how we view seasonality, in the latter half of FY '23 compared to what you're projecting for Q1. Can you explain the factors influencing this? What gives you confidence in that acceleration beyond the obviously easier comparisons? Additionally, your stock has decreased to levels it was at before COVID, which drove significant demand. Why provide a billings guide if it indicates considerable acceleration in the year's second half? Is this based on your pipeline or something else that instills that level of confidence, considering how rapidly circumstances can change? I have a follow-up as well.

Sure. So I think I'll start, and then I'm sure Dan will have some good thoughts as well. So I think just to level set on Q1, if you think back to early fiscal '22, we continue to benefit, particularly in Q1 of last year, from the macro tailwinds coming out of the year prior, right, with strong residual customer demand. And we talked on the Q1 call last year about some of the dynamics around that, which included accelerated consumption and expansion, things like one-time use cases that fell into Q1, and then early renewals played a big dynamic. So if you think about that as macro tailwinds that helped us in Q1 last year, we have kind of the opposite in terms of some headwinds this year. So I'd say, when you look at the Q1 guide, you have to remember that last Q1 was exceptional, and it was a pretty extraordinary quarter. And so we've really been tapering off those levels since this time last year, and we expect to build back over the next few quarters as some of these go-to-market initiatives take hold. So I'd kind of leave you with that thought, particularly as we look at the Q1 numbers.

And the only thing I'd add to that is that if you take a look at the level of execution that implies, while it's increasing, as you said, across the year, we're also revamping, as Tyler asked about earlier, our go-to-market organization. And just to be really clear, we've not performed the way we would like to perform at the end of this year. At the beginning of this year, we're not going to be yet back to the performance we'd like to have. It is going to take a little bit of time. So we're quite optimistic that as the new leadership gets a chance to get embedded that we have this incredible market opportunity and this really large customer base, as you saw the numbers increasing at good rates with 60,000 new adds just in the last quarter. So we've got a lot of opportunity for our land and expand motion. So we are confident that our teams will rise to that occasion and then drive that improved performance throughout the year.

Okay. Great. That's helpful. And then I wanted to look at international. So international decelerated by a pretty dramatic magnitude from Q3 to Q4. Maybe walk us through what's going on in international, how we should be thinking about that going forward. I mean especially because, look, as we've talked about before, international feels like it should be a lot more underpenetrated and, maybe as a result, shouldn't be suffering from the lack of demand generation to the same extent as the U.S. And yet, we're seeing a 13 points of deceleration from Q3 to Q4. So maybe can you walk us through what's going on internationally as well?

Yes, I'll start with that one. So on international, we were quite pleased with the performance in Q4 and for the year, right? So 24% of our revenue came from international, and it was a 55% growth rate year-over-year. So again, we were quite pleased with the performance. We saw particular strength in EMEA and APJ around some of the initiatives and investments we've made there. So I would say we would expect that to continue. As we look into the year, we're making a lot of international investments. And in some ways, it's really our biggest growth opportunity when we look across the business is international.

Our next question comes from the line of Jake Roberge with William Blair.

Just wanted to touch base. You mentioned some of your ancillary products like remote online notary and ID verification on the call. I was just kind of curious how that's tracking at the start of this year and what your expectations for these markets are over the next few years and when we could really just expect those to be a more material portion of your revenue base.

Yes. So two thoughts, one, obviously, the starting point, particularly something like notary, which really wasn't until Q4 that we had, what I'd say, significant sales success there. So very, very small numbers. But from a growth standpoint, quite substantial. We were 4x where we sort of thought we were going to be in Q4 in terms of that sales growth. And we've now really added a reasonable number of customers. Our challenge now moves to that success part of the organization that we talked about, which is making sure that the folks adopt and really integrate that notary into their overall business. So we're excited about that. And when we look at your questions around identity, I think it's the single biggest sort of, if you will, eSign Plus product category we have. And our enthusiasm there is quite high that, that will continue to grow into being eventually a meaningful contributor as you asked about. So we're, again, early low numbers, but that's been a real bright spot for us as we finished up Q4.

Awesome. As a follow-up, I'm curious if there’s anything noteworthy regarding competition or customer churn. Is this mainly related to customers in real estate and financial services, considering that mortgage refinancings are significantly down this year? Are we seeing customers who overbought now reassessing their agreements? Or is the eSignature market becoming more competitive this year?

Yes. So two things. Before this call, Cynthia and I reviewed our pricing and competition strategies to see if there were any changes. This quarter does not present any substantial differences; we do not observe any meaningful shifts in pricing or competitive intensity. Additionally, in my discussions with customers, DocuSign continues to be recognized as a clear market leader with significant product capabilities and differentiation, and I do not see that changing. Regarding your hypothesis, the aggressive demand we experienced a year ago is indeed the primary factor influencing the macro changes. Moreover, your observation about the financial services sector—specifically in the mortgage space and other financial services, rather than the real estate industry itself—holds true. These sectors, alongside healthcare, life sciences, and government, were the ones that expanded most rapidly over the past six to seven quarters when COVID-19 had a significant impact. Therefore, they likely have a substantial amount of product on hand and are now expressing that while they appreciate DocuSign and remain uninterested in other options, they will grow at slower rates until they fully utilize their existing resources. This is how I would characterize the situation.

Yes. I want to add that Dan is correct about the verticals. Just to remind everyone, we don’t have any concentration in specific verticals. We always try to provide some context around this area. One of the great aspects of DocuSign is that we serve all verticals, from the smallest to the largest customers, and we operate in 180 countries. This results in a highly diversified customer base.

Our next question comes from the line of Stan Zlotsky with Morgan Stanley.

Two quick questions on just high level. As far as the changes that you guys are making to the sales organization, is there anything different that's happening in the changes that are being made in the U.S. versus what needs to be made in international?

Yes. Dramatically different. As we talked about a little bit, it may not have been clear enough on the prepared comments, Stan. We felt we had made the moves to really solidify our leadership in both success and sales in our core international markets. So in APJ, LATAM and in EMEA, which is our biggest international market, we're excited. We're not making changes to the leadership there. We're trying to integrate the sort of performance there by having the success in the sales team to work more closely together. I think they're already naturally doing that in those markets better than we're doing in the U.S., but we even want to sort of push that even further to ensure we're bringing that core motion of signing up a customer, getting that land that we talk about, driving the adoption and that success, which then leads right into the expansion opportunity. We really want to refine that. In North America, it's quite different. As I said, we're actually replacing the core North American sales leadership. And by the way, many of those people have done incredible work for DocuSign and will have other roles in DocuSign. It's not that we're necessarily pushing anyone out of the company. But we see an opportunity to bring in additional in the SMB, commercial and enterprise levels, new leadership there that's had more scale experience, which is related to the fact that our North American business is still 76% of our revenue and so, therefore, significantly a higher scale than any of the international markets. So that's where the changes that we're making to the sales leadership are occurring.

Got it. And then just a quick follow-up, just on fiscal '23 billings guide. With billings guide essentially implying what was calling roughly 15% growth, if net revenue retention stays in the typical 112% to 119% range, it almost feels like there's limited implied new customer acquisition. So maybe just kind of walk us through how are you thinking about pace of new logo acquisitions into fiscal '23 because, obviously, it continues to be very strong. So what's implied in that guidance there?

Yes. Thanks for the question. So as you know, we always give our best view of what we're seeing kind of where we're sitting in the year, in the quarter. And so we're very consistent in terms of how we give the guide. I think when you think about the net adds, we're very pleased with the net new adds that we added during the course of the year and in Q4. And remember, we have a land and expand model. And so the net new each period doesn't necessarily contribute the largest dollars when you're looking at some of the metrics like billings or revenue. But the land and expand, we are very focused on landing new customers because they become the expansions of tomorrow, but they tend to start out very small, expand in small increments over time. And so that is as well built into the guide. But it is a land and expand model as we think about whether it's revenue or billings.

Our next question comes from the line of Karl Keirstead with UBS.

Maybe I'll direct this one to Cynthia. Cynthia, your operating margin guide for fiscal '23 was a little bit higher actually than I was thinking. And I think a lot of people thought it might be a little bit lower given DocuSign's got a big need to invest, wage inflation, an uptick in T&E costs, but it's only down 2 points from your peak. Can you talk through what perhaps some of the offsets to those sources of cost pressures are that got you landing at the 18% number?

Yes. So the guide is 16% to 18% coming off of kind of the peak, that was, I guess, 20%-ish, right, during the course of last year. And we've been talking about this since Q1 of last year when we saw the revenue upside that we would expect the margin to come down. And we're very focused on investing for growth. We're investing a lot, both in kind of the go-to-market initiatives that we've been talking about, sales capacity, success and marketing but also product innovation. And then remember, we've also doubled our business in a very short period of time in the last two years-ish. We've doubled the top line, and so we're also investing quite a bit kind of across the operations to really support the scale and the growth that we're at. So we think we have the right level of investment. As we move through the year, if we see opportunity to invest more for growth and invest productively, we will. But right now, we're looking at 16% to 18% margin, and we think that's a reasonable investment level to invest back into the business and invest for growth.

And Cynthia, as a follow-up, does that assume any change in average cash comp structure at DocuSign in order to attract and retain employees?

We're constantly assessing the competitive talent market, both for our current employees and potential new hires. We aim to remain market-competitive in terms of cash compensation and equity. So, the answer is yes to both.

Our next question comes from the line of Brad Sills with Bank of America.

I think, Dan, when we spoke last quarter, it sounded like the shift towards expansion wasn't going to be such a significant change. The company had previously succeeded in this area, and it appeared to be a matter of new hires not being trained for that approach due to the influx of new orders. It now seems that, considering the leadership changes you've mentioned, it might be a larger effort than you initially anticipated. Is that a fair assessment? How would you evaluate the efforts so far to transition towards the expansion strategy you are currently pursuing?

Yes, that's a good question. I think about it in two parts. The challenge is to adopt what we internally refer to as the DocuSign way, which enables our team to sell and promote the DocuSign Agreement Cloud. Typically, people begin with eSignature. When it comes to our existing customers, it involves expanding our core signature base as well as integrating eSign Plus and other products like CLM. We feel that our initial efforts were on the right track, and the investments we're making there seem to be promising. We believe we'll be able to move forward with these plans. We recently had our GKO, where we introduced a new methodology and approach aimed at achieving the consistency you mentioned, which we believe is appropriate. Additionally, as we evaluated our performance in our overall go-to-market strategy, we found gaps in our scaled experience and leadership. This realization prompted us to implement significant changes in North America and to appoint a strong overall success and sales leader. I would say the changes we anticipated have been progressing well. We also identified the need to enhance our leadership within the go-to-market team, which is what we announced today. So we are generally on the same path, although we didn't anticipate a few months ago that we would consider such substantial changes in leadership.

Understood, Dan. One more, if I may, please. I think last quarter, you mentioned that consumption patterns and demand on consumption was kind of in line with your expectations. Would you say that's the same this quarter? Any comment there?

Yes. Yes. So I think there's two ways to think about it. One is sort of the amount that we sell, if you will, and the amount that gets utilized. We saw pressure on what gets sold for two different reasons. One was consumption related, were not significantly off, including consumptions growing, but it was not growing the same way it was growing during the COVID years when we had that heightened demand and so many new use cases that people hadn't had before. And quite frankly, we also had a lot of one-time use cases, things like PPE loans. And so now if you look at consumption, if you adjust for things like those one-time use cases and the heightened demand, I don't see any dramatic change in our consumption. But those are meaningful. So as Cynthia said, they have a meaningful impact on our financials for Q1, and really, the first half of this year, some of those use cases going away. And keep in mind, when you think about the growth rate, if someone says, I'm putting in 1 million signatures for some one-time use cases, not only do you lose those millions, so you go the wrong direction, but there's no chance to upsell them. It was a one-time use case. So it weighs down on the growth of consumption and upselling for the overall from that base.

Our next question comes from the line of Alex Zukin with Wolfe Research.

This is Allan Verkhovski on for Alex. I wanted to touch on the revenue guidance. I haven't seen you guys guide for flat sequential revenues before. So can you just unpack the puts and takes there? Is there any incremental prudence within your guide, especially as to how it relates to contribution you can see from EMEA?

Sure. Thanks for the question. So I think when you look at the revenue guide, it's similar to my comments earlier. We're guiding to the visibility we have given the current environment. There's probably two key drivers on revenue behind the guide. One is headwinds from some of the one-time use cases rolling off or renewing at lower levels. The second is just the timing of deals rolling into the quarter and deals rolling out of the quarter. So I'd say that's kind of on revenue specifically. But I would also just reiterate some of the comments I made on a relative basis to Q1 of last year and kind of just the unusual quarter that, that was on a comparative basis.

Got it. And nothing else incremental in terms of how you're thinking about EMEA contribution for the full year?

EMEA, like from a geo perspective?

Yes, from a macro perspective. So yes, so I think what we would say there is we haven't seen a big impact to our business. It's a horrible humanitarian crisis and tragedy, but we haven't seen impact. But EMEA is a large business for us, so it is something that we are looking at closely. And I would just say we are supporting kind of efforts there through our global impact initiatives from a broader perspective, less to do with our business. But it's something we're watching closely, but we haven't seen much, if any, impact there at where we currently sit.

Our next question comes from the line of Kirk Materne with Evercore ISI.

This is Peter Burkly substituting for Kirk. I want to start by mentioning that in the past, you've discussed how achieving $5 billion in revenue will heavily rely on eSignature. Given the current strength in some of your ancillary products and a slight slowdown in the eSignature segment, I’m interested in whether you are reassessing the balance between these areas. Additionally, I’d like to know if there are any changes in your plans for incremental investments, particularly regarding the cross-sell strategy compared to your ongoing investments aimed at improving demand generation.

Yes. I don't think there's any meaningful change on either of those dimensions. As we talked about before, we think it is very early in the eSignature. Just on the eSignature alone, right, we talked about that $25 billion total addressable market. And as I said, we were definitely less than 10% of that. And given our strong market share that we have in this space, I'm not sure that the whole industry is much past 10% penetration there. So I don't think there's anything that suggests to us we'd be less aggressive or bullish on having that be the primary growth opportunity for us. We are very excited about the Agreement Cloud opportunity broadly, but there's nothing that's happened that would change my bullishness on the primary opportunity being eSignature, particularly if you add what we call it eSignature Plus. Those are those other functionalities we talked about like a notary capability, like an identity capability. I think when you add those in, yes, we're squarely focused on the core business.

That's helpful, Dan. I would like to follow up with another question. The growth in large customers is one of the most impressive metrics I see, having increased by over 40%. I'm curious if there are any specific drivers behind this growth. Are these larger customers adopting a more strategic approach to the entire Agreement Cloud solutions, or is their expansion primarily related to increasing their eSignature usage?

So some of each, actually. And if you think about it, we talked about a couple of examples like a large pharmacy company that was not a significant signature user of us. And then they got excited about CLM. And not only did that create the opportunity for growth there, but it unlocked significantly more use cases around signature once they thought about us in a CLM and a CLM-plus mindset. So I think the answer is it's definitely some of both. From an allocation, signature is still, by far, the biggest driver of the increase in customers moving up to that large customer scale for us. And again, the vast majority of our customers still have only a small number of use cases, which points again to 2 things: one, tremendous opportunity; but also, as I've said, we have to own that we haven't executed well enough against that significant opportunity. Because aside from the macro pieces we talked about, a part of this is us doing that fantastic job we need to do and we have done traditionally around that land and then get the success motion and get the upsell motion going. So that's there for us. We just have to execute.

Our final question comes from the line of Scott Berg with Needham.

Dan and Cynthia, I'll actually just leave it with one since we're up against the clock. Dan, I wanted to ask or drill down a little bit more on the change in CRO with the new field sales leader that will eventually join. You're making a lot of changes to the organization before this new leader comes in. I guess how should we think about that kind of dynamic? Because on one hand, you feel pretty confident about the changes you're making. But what if the sales leader comes in and wants to make additional changes, how do we think about kind of that scenario? And with regards to the time frame of when you can start kind of producing at the levels that you really expected to?

Well, I mean, it's a good question. Obviously, something we think a lot about, and it's difficult to speculate, right, on a double level of what that person might want to do and then how we would think about reaction. Obviously, we're not going to bring in a person that has that kind of experience and that kind of scale in their background and say, your hands are tied, you can't make any changes to the go-to-market organization, for sure. But the changes we've made aren't so much dramatically changing the way we do things. We already talked about what we were building out last quarter around the DocuSign way. These changes are really about saying, we need to have more scaled leadership. We have lots of fantastic people at DocuSign. We didn't have enough people who had seen this level of scale. And so I am confident that the new leader that comes into this role, she or he will look and say, 'This is fantastic. You guys have already set me up with a fantastic set of scaled leaders across North America and across the international geographies. You've got folks that have hit their stride at DocuSign and are driving that much higher growth already than we have in North America.' So I feel like we're handing, again, her or him a fantastic hand. But of course, you're right that if the person had different perspectives or other folks that they thought or structured that made sense to change, we, of course, engage with them in a constructive way on that. But my belief is it's nothing but goodness with the changes we've made.

This concludes the question-and-answer session. I'll now turn the call back over to Dan Springer for any closing remarks.

Yes, I will be brief. I want to highlight a few important points. We are genuinely pleased with the strong finish to the year, achieving the $2 billion revenue milestone. We are thrilled about this accomplishment. Exiting the year with a growth rate of 45% is another remarkable achievement. This illustrates the potential that lies ahead of us. We are developing what I believe will be a robust and lasting franchise that is already well-positioned as a market leader. We have a significant total addressable market and opportunities in front of us. It is essential for us to execute effectively, and we are committed to doing so. We look forward to seeing all of you in the upcoming months. Thank you for joining us.

This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.