Docusign, Inc. Q4 FY2024 Earnings Call

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, this call is being recorded and will be available for replay on the Investor Relations section of the website following the call. I will now pass the call over to Roger Martin, Vice President of Finance. Please go ahead.

Thank you, operator. Good afternoon and welcome to DocuSign's Q4 and Fiscal Year 2024 Earnings Call. I'm Roger Martin, DocuSign's Vice President of Finance. Joining me on today's call are DocuSign's CEO, Allan Thygesen and our CFO, Blake Grayson. The press release announcing our fourth-quarter and fiscal year 2024 results was issued earlier today and is posted on our Investor Relations website. Before we begin, 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 product innovation and factors affecting customer demand 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. 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, a 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 a 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 now like to turn the call over to Allan.

Thanks, Roger, and good afternoon, everyone. DocuSign's fourth-quarter operating results reflect strong progress across the three pillars of our strategic vision, accelerating product innovation, improving the reach and effectiveness of our omnichannel go-to-market initiatives and strengthening operating and financial efficiency. Before discussing the pillars, I'll briefly highlight Q4's strong business results. Q4 revenue was $712 million, up 8% year-over-year, while full-year revenue was $2.8 billion, up 10% year-over-year, both outperforming our expectations. Our continued focus on efficiency while still investing for long-term growth drove significantly improved profitability. Q4 non-GAAP operating margin rose to 25%, up one point versus last year, while full-year non-GAAP operating margin improved by more than five points to 26% from 21% in fiscal '23. In addition, free cash flow more than doubled in fiscal '24 to nearly $900 million. Similar to Q3, we're encouraged by momentum across the business. From solid retention and improving usage with existing customers to strong new customer growth, organizations, large and small, continue to invest in DocuSign's value proposition. Let's turn to our strategic pillars, starting with continued improvement in our omnichannel go-to-market initiatives. In Q4, we were encouraged by improving performance with customers managed by the direct sales force. We substantially increased the amount of business from customers signing and renewing multiyear, multimillion-dollar contracts with DocuSign, including Fortune 500 global leaders in energy, industrials, consumer goods, insurance and several federal and state government agencies. Our partner channel has been instrumental in driving large customer momentum. We continue to deepen relationships with strategic, enterprise-focused organizations, including SAP, Microsoft and Deloitte. These organizations are helping to accelerate our customers' digital transformation journeys. They also represent progress in building a vibrant partner ecosystem to extend DocuSign's reach into new markets and customer segments. To that end, we recently launched global participation in Microsoft Azure's marketplace. We can now co-sell our entire suite of products to Microsoft's enterprise customers who can draw on their existing Azure commitments to purchase DocuSign licenses. We're encouraged to already have our first $1 million customer from that channel. These partners and many more help us accelerate our customers' digital transformation journeys. We also continue to deliver more efficient customer growth even as we scale. In fiscal '24, we invested to improve our digital and self-serve motions, leading to sustained new customer acquisition growth. In Q4, we surpassed 1.5 million total customers across our digital and direct channels. Our breadth, scale and customer affinity is unique in the broader SaaS landscape and speaks to the continued large opportunity in front of DocuSign. Across our digital, direct and partner channels, international continues to be a strong underlying growth driver. In Q4, international revenue grew more than twice as fast as total revenue and now represents more than 27% of the business, up from 25% last year. The international opportunity remains substantial and is one of our key long-term growth drivers. CRESOL, which is a financial cooperative in Brazil, recently adopted the new WhatsApp integration, adding WhatsApp signing to existing e-signature email usage has reduced delays, increased response times and helped CRESOL generate more revenue and broaden its reach. Much of CRESOL's credit business is with farmers and the agricultural industry with limited rural connectivity. The DocuSign WhatsApp integration allows CRESOL to bridge that connectivity gap and accelerate its credit process from days to hours. Let's turn to product innovation. Across all aspects of go-to-market, product investment is driving customer adoption. The WhatsApp integration I just mentioned led to significant envelope usage in recent customer wins in Latin America. Over 1,000 customers in the UK and Europe have used and now benefit from stronger identity verification products like AI-enabled IDV Premier and our recently launched QES-compliant Identity Wallet. The recent free launch of our premium DocuSign monitor created 1,500 new accounts just this quarter. First Financial Bank, a financial services company headquartered in Indiana is using ID verification to increase the speed of consumer lending and home equity line of credit offerings. This improved security for bank staff removes manual workflows for underwriters and creates a stronger customer experience. First Financial is expanding ID verification to other use cases like credit cards and online account openings. Looking ahead, as we exit Q4, we have several hundred customers in beta in new platform services that will transform DocuSign into a more powerful solution. We'll have much more to share, and we're excited to have you join us virtually to hear about our evolving platform at this year's Momentum Customer Conference in New York on April 11th. Product momentum is clearly creating value for our customers. In fiscal '24, that momentum was validated by third parties like IDC, who named us the e-signature industry leader versus 17 other vendors in its annual worldwide assessment. Also, Gartner named DocuSign as a leader in its Magic Quadrant for contract life cycle management for the fourth year running. To that end, DocuSign CLM customers continue to be at the front line of embracing a broader agreement management use case. In Q4, DocuSign CLM growth once again significantly outpaced overall revenue. This is a positive sign as we see CLM product demand as a precursor to the value we can create across all 1.5 million DocuSign customers. Today, DocuSign CLM helps users automate and manage complex workflows, and we see the future as taking those capabilities to a broader set of users than CLM reaches today. We're seeing strong adoption of our CLM product among enterprise customers. Just this quarter, a luxury automaker used our CLM to create an elegant sales experience to match its brand value proposition. A multibillion-dollar global manufacturer sped up its legal and supply chain operations with a company-wide implementation of DocuSign CLM. And a global energy company accelerated its sales processes and streamlined procurement with CLM. Our third strategic pillar is strengthening DocuSign's operating and financial efficiency. In February, we announced further cost management initiatives, including a reduction in force. This decision streamlined our business and focused investments on initiatives that provide the strongest foundation for long-term growth. Blake will share more details on the financial impact and its impact on improving profitability. In conclusion, fiscal '24 was critical to strengthening DocuSign's foundation. We've reaccelerated product innovation, invested in our leadership talent and rightsized our organization. These are all critical steps to realize the multiyear journey to transform agreement management. And we're just getting started. The opportunity in front of DocuSign remains massive. Today's world runs on agreements, but agreement processes haven't changed in the last 100 years. Our sole focus is transforming those systems for our 1.5 million existing customers to make agreements more valuable for enterprises and SMBs alike. As organizations transition to a digital world, customers turn to DocuSign as the world's most trusted agreement company. We are excited for fiscal '25 and the continued impact we will have on our customers. Thank you to our incredible team for your passion and dedication to our vision and culture. With that, let me turn it over to Blake.

Thanks, Allan, and good afternoon, everyone. Throughout fiscal 2024, we continue to build a solid foundation on the three pillars of our strategic vision, accelerating product innovation, enhancing our omnichannel go-to-market initiatives and strengthening our operating and financial efficiency. As a result, in Q4, we delivered strong operating and financial results. Q4's financial performance exceeded the high end of guidance across every metric, with material improvements in operating income, operating margin, and free cash flow. Total revenue in Q4 increased 8% year-over-year to $712 million, and subscription revenue also grew 8% year-over-year to $696 million. Billings of $833 million grew 13% year-over-year, accelerating from 5% year-over-year in Q3. Q4 represented our highest year-over-year billings growth performance in over a year. With respect to billings, approximately half of the eight-point acceleration versus Q3 came from solid execution around renewals, especially with large customers. This includes spillovers from the prior quarter and better early renewal strength from contracts that would have otherwise been billed in fiscal year '25. The remaining half came from a strong close to Q4 and net new growth, which will support the business in future quarters. Similar to Q3 results, we are encouraged by continuing signs of stabilization in the business. Customer usage continues to improve. Total envelope sent increased moderately year-over-year. We saw improving year-over-year usage trends in key verticals with technology, insurance, business services, financial services and healthcare, all growing faster than the total business baseline. Customer retention is stable with positive large customer momentum. Gross retention was flat year-over-year in Q4 across the direct book of business. As expected, dollar net retention trended downward in Q4 to 98%, and we're encouraged that the pace of year-over-year decline slowed substantially in fiscal year '24 versus fiscal year '23. We anticipate the moderating trend to continue in fiscal year '25, and we expect dollar net retention to be flat to down slightly in Q1 '25. The number of customers spending over $300,000 annually rose to 1,060 in Q4, increasing sequentially for the second quarter in a row. Also, Q4 bookings for customers with total contract value over $1 million increased by more than 50% year-over-year. New customer acquisition volume remained strong in Q4, partly due to improvement in go-to-market initiatives. DocuSign ended the year with over 1.5 million customers, up 11% year-over-year and consistent with growth in Q3. Direct customers grew 15% year-over-year also consistent with Q3, bringing total direct customers to 242,000. International revenue, a key long-term growth driver, grew at more than double the overall revenue growth rate and is now 27% of total revenue. We believe the international growth opportunity remains large. Operating and financial efficiency initiatives drove strong performance in fiscal year '24. Improved execution led to a significant expansion in operating margin and a more than doubling of free cash flow versus fiscal year '23. Non-GAAP gross margin for the fourth quarter was 82.5%, in line with the prior year. Fourth quarter non-GAAP subscription gross margin was 85%, also in line with the prior year. For the full year, non-GAAP gross margin was 83%, up slightly from last year. Q4 non-GAAP operating income was $178 million, up 15% year-over-year with an operating margin of 25%, improving over 100 basis points year-over-year. We saw a more significant improvement in fiscal year '24, with a record non-GAAP operating income of $711 million, up 38% year-over-year, resulting in a 26% operating margin. We will continue to focus on realizing opportunities to achieve greater efficiency as we invest to drive sustainable long-term growth. Free cash flow improvement was even stronger in Q4 and fiscal year '24. In Q4, free cash flow was $249 million. And for the full year, we generated $887 million in free cash flow, with both periods more than doubling year-over-year, resulting in a 32% free cash flow margin for fiscal year '24. Greater operating efficiency led to a substantial working capital improvement that drove free cash flow yield above our operating profit margin. Going forward, we anticipate free cash flow margin to more closely approximate non-GAAP operating margin. In fiscal year '24, we used a portion of free cash flow to purchase DocuSign shares. We used $146 million towards repurchasing common stock. We ended Q4 with 6,840 employees, a 7% decrease year-over-year from 7,336 at the end of fiscal year '23. This results from our ongoing focus on investing efficiently in the business and does not reflect the reduction in force announced on February 6th of this year. We will continue to optimize our hiring plans to align our sales organization with our digital and partner GTM motions, support long-term growth opportunities in R&D and realize efficiencies of scale and G&A. With regard to the balance sheet, during the quarter, we used approximately $690 million of cash to settle our remaining outstanding convertible debt. We currently have no debt on the balance sheet. As we think about guidance for Q1 '25 and fiscal year '25, we expect total revenue of $704 million to $708 million in Q1, or a 7% year-over-year increase at the midpoint. For fiscal year '25, we expect revenue between $2.915 billion and $2.927 billion, or a 6% year-over-year increase at the midpoint. Of this, we expect subscription revenue of $686 million to $690 million in Q1, or an 8% year-over-year increase at the midpoint. And $2.843 billion to $2.855 billion for fiscal '25, or a 6% year-over-year increase at the midpoint. We expect non-GAAP gross margin to be 81% to 82% for both Q1 and fiscal '25. We expect non-GAAP operating margin to reach 27% to 28% for Q1, and 26.5% to 28% for fiscal '25. Our non-GAAP operating margin guidance includes the impact from the recently announced restructuring of approximately 400 employees, or around 6% of our employee base. While we intend to reinvest a small portion of the restructuring savings into the business, primarily in R&D, the vast majority of savings will drop to the bottom line as reflected in our expected operating margin expansion in fiscal year '25. We are committed to improving efficiency while still investing in the areas we believe will drive long-term growth. We expect non-GAAP fully diluted weighted average shares outstanding of 208 million to 213 million for both Q1 and fiscal '25. In closing, we're pleased to report another quarter of progress against our three strategic pillars, accelerating product innovation, enhancing our go-to-market initiatives and strengthening our financial and operational efficiency. Q4 execution was particularly strong as the team delivered accelerating billings growth, double-digit customer growth, with improving operating margins and record free cash flow generation. That concludes our prepared remarks. With that, operator, let's open up the call for questions.

Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question comes from the line of Tyler Radke with Citi. Please proceed with your question.

Yeah, thanks for taking the question. A couple for Blake, just to kick things off. So Blake, I appreciate the comments on kind of unpacking the Q4 billings outperformance. Obviously, the nine-point beat versus the guide was pretty impressive. As I think about the moving pieces on that, could you just help frame the Q1 guide relative to the full year guide on billings? I think the full year would imply you need to grow a little bit faster than you're guiding to on billings in Q1. So curious if some of that's related to the pull forward? And then secondly, how should we think about NRR trends? I think that dipped below 100% at 98%. So as you just think about the drivers between expansions and new business for next year, just help us understand the trajectory of that and how that all fits into the guide. Thank you.

Sure. And thanks for the question. To address the question on billings, I think it's helpful to kind of cover it in totality. Starting with Q4 and then going into 2025, because the timing does play a big role as you think about the year-over-year comps. Just to recap quickly, Q4, really pleased with the execution and the acceleration from Q3. Like you heard in the prepared remarks, half of that acceleration was from renewals timing, including early renewals from fiscal year '25. In Q4, our book of renewals had the highest contribution from early renewals for any quarter that we've seen all year long, and that's okay because that's great execution by the team; we're super happy about that. And then the other half was just from strong net new growth. Now that timing component impacts fiscal '25. So with respect to Q1, and this also applies to Q2, there are two hard comps to deal with in the first half of this year. The first is, if you recall, we had really strong on-time renewals in the first half of 2024, that came about because we made some adjustments to our sales incentive plans to improve execution there. And the other hard comp is that Q4 component that I just mentioned that leads to some less spillover into Q1. So those two hard comps apply, obviously, to the full year as well, and you've got to normalize for that a bit. As for the dollar net retention question, we did trend down as expected, in line with our expectations into Q4. There's still a tough macro environment out there for us where companies are scrutinizing investments, and it just leads to smaller expansion opportunities. However, I am quite encouraged by the pace of decline in fiscal '24 compared to fiscal '23. We're expecting the pace of decline to slow even further into fiscal '25. And you heard in the prepared remarks, we're actually forecasting for Q1 dollar net retention rate to be flat to down slightly from Q4. Part of that is related to the fact that we're coming out of these COVID comps. I think that's one of the things where you can see this flattening out. There are also a number of encouraging signs for us around renewal rates and consumption, and we have new product launches releasing into general availability later in the year.

Hey, thanks for taking the question and congrats on the great results. Blake, just a follow-up on that DNR remark. Can you help us understand how much of the downtick in that metric was driven by those remaining COVID-era contracts that you just called out in your last answer? And then, Allan, it looks like you actually reaccelerated new customer adds this quarter. Do you feel like the 40,000 quarterly adds is the right way to think about the business moving forward? Or could that actually continue to ramp as the macro normalizes, and some of those new product-led growth initiatives take hold?

I'll just take a stab at the DNR follow-up and then Allan take the other one. We're not breaking out the level of detail and granularity in the DNR from COVID. I think it's just an obvious output where we have some pretty strong expansion in those prior quarters. But that said, we are seeing signs of stabilization in the business. It's definitely not all related to COVID. I don't want to have anybody walk away with that thought process or perspective. But I think it's one of these things that we are seeing stabilizing signs on our business. Allan?

On the second question related to customer acquisition, yes, I don't know that we track and measure ourselves that directly on that. But I would just say we have a healthy customer acquisition funnel. There is still white space, particularly internationally, and we're benefiting from that and I think getting our fair share, although, of course, I always like even more. But I'm not prepared to make any forward-looking statements about the exact number of acquisitions we'll have on a quarterly basis.

Great. Thanks for the question. I want to shift over to margins and profitability. Allan, a question for you. If you could just talk a little bit about the change in investment philosophy from the top. And Blake just wondering the comments around commitment to improving efficiency, does that translate to continued margin expansion even after FY'25 as we think about 2026 and beyond?

Yes. So first on our overall investment and expense philosophy. We want to balance solid operational execution and efficiency today with being able to invest for the medium to long-term growth that we think we have in front of us. That balance is what we're taking. We will keep looking for opportunities, and it's obviously not all about headcount. We have gotten tremendous efficiency out of the organization on many fronts. That's what produced the strong results that you saw in Q4, really, throughout the year, and the operating cash flow improvements. So we'll keep looking for those opportunities. But we feel we're right-sized for our plan right now. If we start seeing further investment opportunities, then we will invest, but we do that on a cautious and informed basis.

And then just a follow-up on your question on just margins in the future. I'm really proud of the efficiencies that we've gained this year. In fiscal '23, our sales and marketing expense was 40% of our revenue. In this year, fiscal '24, it improved to 34%. I expect next year to be in the low 30s. For us in the future, we have opportunities to be able to drive further operating leverage with scaling growth. The question will be whether we can grow our revenue faster than we do our expense base. One of the things we're focusing on as a team is you hear about PLG motions and self-service motions; those opportunities provide us the ability to improve margins into the future.

Thank you, Blake and Allan, for addressing my questions. This is Luv Sodha representing Brent Thill. I would like to start by asking Allan if you could elaborate on the improvements this quarter, specifically whether they were primarily due to better execution or macro normalization. Could you identify which verticals contributed to the improvements observed? Additionally, Blake, it seems that free cash flow was notably strong this quarter. Could you discuss your plans for utilizing that free cash flow, particularly concerning share repurchases?

Yes. We really did see strength across the board. So our cost segments, Blake highlighted that we had progress both on the enterprise side and the SMB side. From a geography perspective, yes, we grew faster internationally, but we did grow everywhere. And on the industry side, we did see broad-based strength there as well as some recovery effects in mortgages; we sell to customers in all industries. There isn't much there. At an overall macro sentiment, I would say, marginally improved from my standpoint. But I think there was a little bit of help across the breadth of our business. So that's our view.

We're in a great spot. We ended the quarter of the year with cash and investments of $1.2 billion. No debt now on the balance sheet. We used some of that for stock buybacks, but we also used it to retire debt. We can invest in the business; M&A opportunities for us. We're likely to be more active than you think we are about looking around for what opportunities are available for us. There's also options for dividends down the road. We're feeling stabilizing results and operating efficiency improvements; we believe we can increase our ability to return capital to shareholders while still investing in the business. We're committed to increasing the rate at which we return excess capital opportunistically to shareholders.

Hi. This is Chris Fountain on for Rishi Jaluria. Thanks for taking my question. I wanted to first ask about the large customer cohort strength that you saw in the quarter. Is that driven by better volume and consumption trends? Or are CLM capabilities starting to push some customers over that $300,000 ACV cohort? And then, I was wondering if you could just dig in a little bit more to the R&D investment priorities you mentioned for the coming year?

Yes, I would say definitely saw improvement in enterprise customers, again, the $300,000 accounts growing sequentially quarter-over-quarter. From a renewal rate perspective, enterprise still has room to improve. But our renewal rates improved sequentially from Q3 to Q4 in the enterprise space more than any other large customer segment that we had. We’re mostly excited about the opportunities and our R&D investments.

On the R&D investment front, we've long felt there was an opportunity to reimagine the agreement journey for companies large and small. We've added solutions at various stages of that journey, obviously, most exemplified by our signature products. We will release a broader suite of solutions soon, and there has been a significant investment in that effort during the course of the last fiscal year. This will continue because we have a multiyear road map of value creation ahead. In addition, we are moving our platforms to the public cloud, Microsoft Azure; that's a significant effort from an infrastructure perspective.

Hey, this is Adam Bergere on for Brad. I guess I'd like to start, what are some of the initiatives you are making in terms of product-led growth or self-serve motions? And what changes have you made so far there? And what changes do you still want to make?

So I think during the course of the fiscal year that we just finished here, a lot of our effort was on making the process of buying DocuSign directly from DocuSign and on our website much more seamless. We made substantial improvements there. So much better flows to allow you to easily upgrade solutions to focus on variety of payment solutions. This year, that will expand beyond the core e-signature products to some newer products and to support other channels. Those notably our direct sales channel. Significant capabilities will be added throughout the year.

Hey, thanks for taking my question. This is Austin Cole on for Pat. So last quarter, it seemed like you mentioned that there was kind of an uptick in interest in CLM, and now you're seeing strong adoption of CLM among enterprise customers. Is there an incremental improvement in tone there? Or can you just talk broadly about the CLM opportunity and how you guys are situated?

Yes. I do think the CLM market overall is improving. More and more companies are realizing that better managing their agreements and getting more value out of them is a strategic opportunity. It's rising in priority, so we're seeing more RFPs and so on. In terms of our competitive position, I think we're in a very strong position as illustrated in the Gartner survey. We have the largest number of accounts and are well rated by customers for our experience. There’s more opportunity to popularize CLM to a broader audience.

You heard in our prepared remarks, CLM grew faster than the total business and also accelerated on a year-over-year basis from Q3 to Q4. It's still a smaller share of our business, but encouraged by that acceleration for that product.

This is Rob Morelli on for Scott. Thanks for taking my question. Helping for margin here with non-GAAP operating margins expanding 500 basis points. However, G&A was actually up as a percentage of revenue. Two questions here. First, why were we not able to drive leverage here throughout the year? And then second, how do we think about the spend in 2025 in this line of events?

Yes, G&A expense, non-GAAP G&A was up 14% year-on-year. There are two unique items that are contributing to that. One is we used to have an immaterial dollar amount; when you look at a relatively small SEC split out bucket, it has a bit of an effect. A couple million dollars, we used to allocate out in the prior year; we're not doing that now, but it's an immaterial dollar amount overall. Higher litigation cost for us this year versus last year is also a contributing factor. Excluding those two unique items, G&A would have grown in the low single-digits year-over-year. We're focused on driving efficiencies across the business.

Thank you for taking my question. Allan, could you dig in a little bit deeper on the international strength you're seeing? How much of that is being partner-led? What are you seeing from your digital initiatives there? And maybe give us some color on the regional breakdown.

Our international growth is led more by our direct channel today. There is a lot of headroom for digital and partner side; I think we have substantial opportunity there, but most of the growth is coming from our direct sales efforts, particularly in the larger focused countries. For example, we have been investing in Japan and Germany, but today, the UK, Australia, Canada, and France are a little larger than both of those. So all those markets are priorities.

Hi. Thanks for taking my question. Just a quick one around your LLM training. I know there was some stuff in the media regarding privacy. From your perspective, what are your internal policies? And how are you training those LLMs?

Yes, I want to be very clear. We do not use any customer data for training any of our AI models without specific contractual consent from customers. We have a high trust position with customers. They trust us with their most sensitive documents. We are moving cautiously on that. We are very excited about what AI can bring, and our customers are asking us to extract more value using modern AI technology. You'll hear more about that at our Momentum conference. Trust is the starting position, and if you grant us consent, we will anonymize and aggregate that data; there’s no opportunity for any confidential issues or data leakage.

Thank you very much, and congrats on a nice finish to the year. Thinking back to last quarter, you had mentioned the introduction of some new enterprise licensing structures. Wondering if you can shed a bit more light on any changes made there. And did it have any effect on Q4 financial results—any type of impact to think about from those changes going forward?

Yes, we have done a few deals like that, and I think it will continue to grow with some of our very largest clients. As we offer a broader set of products, obviously, an enterprise license becomes more interesting as you can mix and match across products. It remains a small part of the business, and some of our very largest customers remain on an envelope basis. However, we improved our motion and worked on getting our large deal desk and senior people on it.

While we're excited about specific cases, it's not a huge number for us today, but it's growing, and there was no material impact on our results for Q4. We have a very broad and diverse customer base, and we don't have single customers that greatly impact us, which is a strength.

To summarize, we have leaned in significantly harder to make sure that we are competitive in large enterprise deals, and we did some very large renewals with some large customers, partly as a result of that improved motion.

Hi, thanks for taking my question. I just wanted to touch on free cash flow. You had a very strong free cash flow generating quarter and year, maybe shed some light on what drove that? Was it some of the renewal timing? And how can we think about the relationship between operating margin and free cash flow moving forward?

Yes, we did have a very strong quarter and year regarding free cash flow; we had a 32% free cash flow yield for fiscal '24. The reason why it’s materially higher than our operating margin is working capital tailwind from two components: first, we had a year-ago ERP implementation that caused collection delays, so earlier this year, we had a tailwind. Also, we’ve improved our collections process considerably. Going forward, while we’re going to strive for efficiencies, it’s not easy to repeat working capital improvements year-over-year. Thus, we expect free cash flow yield to more closely approximate non-GAAP operating margin.

Hi, this is Arsenije on for Alex Zukin. Congrats on results. With the international strength you have seen this year, I think it has contributed close to 45% of total revenue growth in fiscal '24. Do you expect this to be an even greater contribution to growth in fiscal '25? Does this mix stay the same? Or do you think there is strong renewal expansion domestically that leads to more US contribution to the top line growth in fiscal '25?

Yes, we are really happy with how our international growth has progressed. All of our major regions grew at double digits in Q4. Just to reiterate, the international opportunity for us is quite sizable. Only 27% of our revenue in Q4 came from our international business. If you think of GDP as a proxy, I think we have a sizable longer-term opportunity there, but I am not providing guidance on whether it will accelerate or slow down.

Thank you all for joining and for your support as we continue to build a solid foundation for DocuSign. We are proud of the strong results in Q4 and of the progress that we're making to reinvigorate innovation and add value for our customers, our employees, and shareholders. We look forward to what will be a very exciting fiscal 2025. Thank you. We'll see you next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.