DOCU 8-K
Docusign, Inc. (DOCU)
8-K
2023-06-08
For: 2023-06-04
View Original
Added on
April 12, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________
FORM 8-K
______________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 4, 2023
Commission File Number: 001-38465
______________________________________
(Exact name of registrant as specified in its charter)
______________________________________
| (State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification Number) | |||||||||||||
| (Address of Principal Executive Offices) (Zip Code) | ||||||||||||||
(415 ) 489-4940
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On June 8, 2023, DocuSign, Inc. (the “Company”) reported financial results for the three months ended April 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The press release is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The information in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed incorporated by reference into any registration statement or other filing with the Securities and Exchange Commission (“SEC”) made by the Company, whether made before or after the date of this Current Report, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific references in such filing.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(d)
Following the recommendation of the Company’s Nominating and Corporate Governance Committee of the Board of Directors (the “Board”), the Board appointed Anna Marrs to fill an existing vacancy on the Board to serve as a director of the Company, effective June 4, 2023. Ms. Marrs will serve as a Class I director whose term will expire at the Company’s 2025 Annual Meeting of Stockholders, which is the next stockholder meeting at which Class I directors will be elected, and until Ms. Marrs’s successor shall have been duly elected and qualified, or until Ms. Marrs’s earlier death, resignation, disqualification or removal. The Board also appointed Ms. Marrs to serve as a member of the Audit Committee, effective June 4, 2023. The Board determined that Ms. Marrs qualifies as an independent director pursuant to the Securities Act and the listing standards of the Nasdaq Stock Market.
There is no arrangement or understanding between Ms. Marrs and any other person pursuant to which Ms. Marrs was selected as a director. Ms. Marrs has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. Ms. Marrs will receive compensation for her service as a member of the Board in accordance with the Company’s Amended and Restated Director Compensation Program, which will be filed with the SEC as an exhibit to the Company’s Quarterly Report on Form 10-Q for the three months ended April 30, 2023.
Ms. Marrs has also entered into the Company’s standard form of indemnity agreement, which is attached as Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on December 3, 2020.
Item 7.01. Regulation FD Disclosure
A press release dated June 8, 2023 announcing Ms. Marrs’ appointment to the Board is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein. The information in Item 7.01 of this current report, including Exhibit 99.2 attached hereto, is furnished and shall not be treated as filed for purposes of the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit No. | Description | ||||||||||
| 99.1 | |||||||||||
| 99.2 | |||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June 8, 2023
| DOCUSIGN, INC. | ||||||||
| By: | /s/ Cynthia Gaylor | |||||||
| Cynthia Gaylor | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Accounting and Financial Officer) | ||||||||
DOCUSIGN, INC.
Exhibit 99.1
DocuSign Announces First Quarter Fiscal 2024 Financial Results
San Francisco – June 8, 2023 – 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 April 30, 2023.
“DocuSign’s first quarter results, coupled with traction on our strategic objectives reflect a solid start to the year," said Allan Thygesen, CEO of DocuSign. “While we have work ahead of us, I am encouraged by our progress to enable smarter, easier, trusted agreements. As we continue to execute on our strategy and leverage our competitive advantages, notably in AI, DocuSign is well positioned for the future.”
First Quarter Financial Highlights
▪Total revenue was $661.4 million, an increase of 12% year-over-year. Subscription revenue was $639.3 million, an increase of 12% year-over-year. Professional services and other revenue was $22.1 million, an increase of 14% year-over-year.
▪Billings were $674.8 million, an increase of 10% year-over-year.
▪GAAP gross margin was 79% compared to 78% in the same period last year. Non-GAAP gross margin was 83% compared to 81% in the same period last year.
▪GAAP net income per basic share was $0.00 on 203 million shares outstanding compared to a loss of $0.14 on 200 million shares outstanding in the same period last year.
▪GAAP net income per diluted share was $0.00 on 208 million shares outstanding compared to a loss of $0.14 on 200 million shares outstanding in the same period last year.
▪Non-GAAP net income per diluted share was $0.72 on 208 million shares outstanding compared to $0.38 on 206 million shares outstanding in the same period last year.
▪Net cash provided by operating activities was $233.6 million compared to $196.3 million in the same period last year.
▪Free cash flow was $214.6 million compared to $174.6 million in the same period last year.
▪Cash, cash equivalents, restricted cash and investments were $1.4 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:
•Executive Appointments. DocuSign appointed the following key new leaders:
◦Blake Grayson as Chief Financial Officer. Most recently, Blake served as the CFO of The Trade Desk leading the company's overall financial activities, including controllership, tax, treasury, analysis, investor relations, corporate development, facilities, and financial operations. Prior to becoming CFO of The Trade Desk in 2019, Blake served in various finance leadership roles at Amazon for over a decade.
◦Dmitri Krakovsky as Chief Product Officer. Dmitri joins DocuSign from CP4, where he was the Chief Product Officer. Dmitri also held roles as VP of Product at Google, Chief Product Officer at SAP and Vice President of Products at Yahoo.
◦Kurt Sauer as Chief Information Security Officer. Prior to joining DocuSign, Kurt worked at Workday where he was Chief Information Security Officer. He also served in senior security roles at Skype, Blink Health, Salesforce and PayPal.
•DocuSign Release 1. DocuSign announced new product capabilities with highlights in the following areas:
◦Web Forms: Launched Webforms, an interactive solution enabling organizations to capture data and generate dynamic agreements for signature. With conditional logic and customizable features, teams can effortlessly create and manage their own forms, while data collected can be exported, analyzed, and seamlessly integrated with other systems.
◦EHR (Electronic Health Record) Interoperability: Introduced a seamless integration between DocuSign eSignature and certified EHRs in the US market, such as Epic and Cerner, via Infor Cloverleaf in accordance with HL7 FHIR standards. This integration enables a modern patient and staff experience, where patient forms
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collected via eSignature are automatically uploaded to the patient record in the EHR, eliminating manual sending, routing, and uploading of completed forms.
◦ID Verification for EU Qualified: Released AI-enabled remote identity verification that brings the same level of security as face-to-face identification. This solution delivers EU Qualified Electronic Signature (QES)-compliant identification directly within eSignature. With advanced features like liveness detection, selfie comparisons, and asynchronous agent review, the need for video or in-person appointments is eliminated, significantly reducing friction and enhancing the overall signer experience.
◦Document Generation for eSignature: Introduced Document Generation for eSignature, which enables senders to generate personalized agreements directly within eSignature. All information is dynamically inserted to ensure documents are well-formatted and professional-looking. Conditional logic is leveraged to reduce the number of templates needed saving time and effort.
◦DocuSign CLM Essentials Conditional Logic: Introduced enhancements designed to accelerate workflows within CLM. CLM Essentials users can easily customize agreement templates with just a few clicks using conditional logic. Administrators can incorporate conditional rules into document templates, enabling them to hide, show, or populate specific sections of an agreement based on custom criteria, saving time, offering greater flexibility, and ensuring consistent compliance across all agreements.
Outlook
The company currently expects the following guidance:
▪Quarter ending July 31, 2023 (in millions, except percentages):
| Total revenue | $675 | to | $679 | ||||||||
| Subscription revenue | $658 | to | $662 | ||||||||
| Billings | $646 | to | $656 | ||||||||
| Non-GAAP gross margin | 81% | to | 82% | ||||||||
| Non-GAAP operating margin | 24% | to | 25% | ||||||||
| Non-GAAP diluted weighted-average shares outstanding | 207 | to | 212 | ||||||||
▪Year ending January 31, 2024 (in millions, except percentages):
| Total revenue | $2,713 | to | $2,725 | ||||||||
| Subscription revenue | $2,640 | to | $2,652 | ||||||||
| Billings | $2,737 | to | $2,757 | ||||||||
| Non-GAAP gross margin | 81% | to | 82% | ||||||||
| Non-GAAP operating margin | 22% | to | 24% | ||||||||
| 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.
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Webcast Conference Call Information
The company will host a conference call on June 8, 2023 at 1:30 p.m. PT (4:30 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) June 22, 2023 using the passcode 13738634.
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
Media Relations:
DocuSign Corporate Communications
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 diluted weighted-average shares outstanding, and non-financial metrics, such as customer growth, as well as statements related to our expectations regarding our growth. 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; 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 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
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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 April 30, 2023, which we expect to file on June 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, 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% tax rate.
Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.
Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings is a key metric to measure our periodic performance. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.
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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.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended April 30, | |||||||||||
| (in thousands, except per share data) | 2023 | 2022 | |||||||||
| Revenue: | |||||||||||
| Subscription | $ | 639,307 | $ | 569,251 | |||||||
| Professional services and other | 22,081 | 19,441 | |||||||||
| Total revenue | 661,388 | 588,692 | |||||||||
| Cost of revenue: | |||||||||||
| Subscription | 108,942 | 105,159 | |||||||||
| Professional services and other | 27,545 | 27,257 | |||||||||
| Total cost of revenue | 136,487 | 132,416 | |||||||||
| Gross profit | 524,901 | 456,276 | |||||||||
| Operating expenses: | |||||||||||
| Sales and marketing | 280,605 | 300,697 | |||||||||
| Research and development | 115,364 | 112,227 | |||||||||
| General and administrative | 104,811 | 62,578 | |||||||||
| Restructuring and other related charges | 28,772 | — | |||||||||
| Total operating expenses | 529,552 | 475,502 | |||||||||
| Loss from operations | (4,651) | (19,226) | |||||||||
| Interest expense | (1,966) | (1,649) | |||||||||
| Interest income and other income (expense), net | 12,245 | (4,650) | |||||||||
| Income (loss) before provision for income taxes | 5,628 | (25,525) | |||||||||
| Provision for income taxes | 5,089 | 1,848 | |||||||||
| Net income (loss) | $ | 539 | $ | (27,373) | |||||||
| Net income (loss) per share attributable to common stockholders: | |||||||||||
| Basic | $ | 0.00 | $ | (0.14) | |||||||
| Diluted | $ | 0.00 | $ | (0.14) | |||||||
| Weighted-average number of shares used in computing net income (loss) per share attributable to common stockholders: | |||||||||||
| Basic | 202,631 | 199,666 | |||||||||
| Diluted | 208,071 | 199,666 | |||||||||
| Stock-based compensation expense included in costs and expenses: | |||||||||||
| Cost of revenue—subscription | $ | 11,357 | $ | 10,613 | |||||||
| Cost of revenue—professional services and other | 6,730 | 5,082 | |||||||||
| Sales and marketing | 45,326 | 47,431 | |||||||||
| Research and development | 35,997 | 32,205 | |||||||||
| General and administrative | 40,342 | 15,392 | |||||||||
| Restructuring and other related charges | 4,954 | — | |||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in thousands) | April 30, 2023 | January 31, 2023 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 940,494 | $ | 721,895 | |||||||
| Investments—current | 350,763 | 309,771 | |||||||||
| Accounts receivable, net | 408,632 | 516,914 | |||||||||
| Contract assets—current | 17,454 | 12,437 | |||||||||
| Prepaid expenses and other current assets | 86,719 | 69,987 | |||||||||
| Total current assets | 1,804,062 | 1,631,004 | |||||||||
| Investments—noncurrent | 120,803 | 186,049 | |||||||||
| Property and equipment, net | 206,026 | 199,892 | |||||||||
| Operating lease right-of-use assets | 135,403 | 141,493 | |||||||||
| Goodwill | 353,308 | 353,619 | |||||||||
| Intangible assets, net | 65,247 | 70,280 | |||||||||
| Deferred contract acquisition costs—noncurrent | 359,255 | 350,899 | |||||||||
| Other assets—noncurrent | 85,795 | 79,484 | |||||||||
| Total assets | $ | 3,129,899 | $ | 3,012,720 | |||||||
| Liabilities and Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 14,688 | $ | 24,393 | |||||||
| Accrued expenses and other current liabilities | 101,685 | 100,987 | |||||||||
| Accrued compensation | 141,990 | 163,133 | |||||||||
| Convertible senior notes—current | 723,995 | 722,887 | |||||||||
| Contract liabilities—current | 1,190,364 | 1,172,867 | |||||||||
| Operating lease liabilities—current | 22,742 | 24,055 | |||||||||
| Total current liabilities | 2,195,464 | 2,208,322 | |||||||||
| Contract liabilities—noncurrent | 17,715 | 16,925 | |||||||||
| Operating lease liabilities—noncurrent | 136,243 | 141,348 | |||||||||
| Deferred tax liability—noncurrent | 12,324 | 10,723 | |||||||||
| Other liabilities—noncurrent | 18,661 | 18,115 | |||||||||
| Total liabilities | 2,380,407 | 2,395,433 | |||||||||
| Stockholders’ equity | |||||||||||
| Common stock | 20 | 20 | |||||||||
| Treasury stock | (2,027) | (1,785) | |||||||||
| Additional paid-in capital | 2,412,033 | 2,240,732 | |||||||||
| Accumulated other comprehensive loss | (21,917) | (22,996) | |||||||||
| Accumulated deficit | (1,638,617) | (1,598,684) | |||||||||
Total stockholders’ equity | 749,492 | 617,287 | |||||||||
| Total liabilities and equity | $ | 3,129,899 | $ | 3,012,720 | |||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 539 | $ | (27,373) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 22,867 | 21,301 | |||||||||
| Amortization of deferred contract acquisition and fulfillment costs | 48,230 | 43,990 | |||||||||
| Amortization of debt discount and transaction costs | 1,246 | 1,284 | |||||||||
| Non-cash operating lease costs | 5,980 | 6,442 | |||||||||
| Stock-based compensation expense | 144,706 | 110,723 | |||||||||
| Deferred income taxes | 1,623 | 72 | |||||||||
| Other | (831) | 4,907 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 108,281 | 140,078 | |||||||||
| Prepaid expenses and other current assets | (16,803) | (16,351) | |||||||||
| Deferred contract acquisition and fulfillment costs | (56,526) | (50,512) | |||||||||
| Other assets | (7,661) | (7,459) | |||||||||
| Accounts payable | (9,021) | (23,197) | |||||||||
| Accrued expenses and other liabilities | 1,095 | 5,148 | |||||||||
| Accrued compensation | (21,582) | (23,220) | |||||||||
| Contract liabilities | 18,287 | 18,712 | |||||||||
| Operating lease liabilities | (6,795) | (8,259) | |||||||||
| Net cash provided by operating activities | 233,635 | 196,286 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of marketable securities | (53,830) | (129,735) | |||||||||
| Maturities of marketable securities | 80,699 | 91,055 | |||||||||
| Purchases of strategic and other investments | — | (2,125) | |||||||||
| Purchases of property and equipment | (19,057) | (21,709) | |||||||||
| Net cash (used in) provided by investing activities | 7,812 | (62,514) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repurchases of common stock | (40,472) | — | |||||||||
| Settlement of capped calls, net of related costs | 23,688 | — | |||||||||
| Payment of tax withholding obligation on net RSU settlement and ESPP purchase | (22,637) | (24,739) | |||||||||
| Proceeds from exercise of stock options | 127 | 1,938 | |||||||||
| Proceeds from employee stock purchase plan | 18,390 | 24,151 | |||||||||
| Net cash (used in) provided by financing activities | (20,904) | 1,350 | |||||||||
| Effect of foreign exchange on cash, cash equivalents and restricted cash | 1,011 | (5,180) | |||||||||
| Net increase in cash, cash equivalents and restricted cash | 221,554 | 129,942 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period (1) | 723,201 | 509,679 | |||||||||
Cash, cash equivalents and restricted cash at end of period (1) | $ | 944,755 | $ | 639,621 | |||||||
(1) Cash, cash equivalents and restricted cash included restricted cash of $4.3 million and $1.3 million at April 30, 2023 and January 31, 2023.
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
Reconciliation of gross profit (loss) and gross margin:
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| GAAP gross profit | $ | 524,901 | $ | 456,276 | |||||||
| Add: Stock-based compensation | 18,087 | 15,695 | |||||||||
| Add: Amortization of acquisition-related intangibles | 2,403 | 2,403 | |||||||||
| Add: Employer payroll tax on employee stock transactions | 675 | 791 | |||||||||
| Add: Lease-related impairment and lease-related charges | 429 | — | |||||||||
| Non-GAAP gross profit | $ | 546,495 | $ | 475,165 | |||||||
| GAAP gross margin | 79 | % | 78 | % | |||||||
| Non-GAAP adjustments | 4 | % | 3 | % | |||||||
| Non-GAAP gross margin | 83 | % | 81 | % | |||||||
| GAAP subscription gross profit | $ | 530,365 | $ | 464,092 | |||||||
| Add: Stock-based compensation | 11,357 | 10,613 | |||||||||
| Add: Amortization of acquisition-related intangibles | 2,403 | 2,403 | |||||||||
| Add: Employer payroll tax on employee stock transactions | 466 | 508 | |||||||||
| Add: Lease-related impairment and lease-related charges | 299 | — | |||||||||
| Non-GAAP subscription gross profit | $ | 544,890 | $ | 477,616 | |||||||
| GAAP subscription gross margin | 83 | % | 82 | % | |||||||
| Non-GAAP adjustments | 2 | % | 2 | % | |||||||
| Non-GAAP subscription gross margin | 85 | % | 84 | % | |||||||
| GAAP professional services and other gross loss | $ | (5,464) | $ | (7,816) | |||||||
| Add: Stock-based compensation | 6,730 | 5,082 | |||||||||
| Add: Employer payroll tax on employee stock transactions | 209 | 283 | |||||||||
| Add: Lease-related impairment and lease-related charges | 130 | — | |||||||||
| Non-GAAP professional services and other gross profit (loss) | $ | 1,605 | $ | (2,451) | |||||||
| GAAP professional services and other gross margin | (25) | % | (40) | % | |||||||
| Non-GAAP adjustments | 32 | % | 27 | % | |||||||
| Non-GAAP professional services and other gross margin | 7 | % | (13) | % | |||||||
9
DOCUSIGN, INC.
Reconciliation of operating expenses:
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| GAAP sales and marketing | $ | 280,605 | $ | 300,697 | |||||||
| Less: Stock-based compensation | (45,326) | (47,431) | |||||||||
| Less: Amortization of acquisition-related intangibles | (2,629) | (3,205) | |||||||||
| Less: Employer payroll tax on employee stock transactions | (1,670) | (2,290) | |||||||||
| Less: Lease-related impairment and lease-related charges | (1,356) | — | |||||||||
| Non-GAAP sales and marketing | $ | 229,624 | $ | 247,771 | |||||||
| GAAP sales and marketing as a percentage of revenue | 42 | % | 51 | % | |||||||
| Non-GAAP sales and marketing as a percentage of revenue | 35 | % | 42 | % | |||||||
| GAAP research and development | $ | 115,364 | $ | 112,227 | |||||||
| Less: Stock-based compensation | (35,997) | (32,205) | |||||||||
| Less: Employer payroll tax on employee stock transactions | (1,408) | (1,533) | |||||||||
| Less: Lease-related impairment and lease-related charges | (492) | — | |||||||||
| Non-GAAP research and development | $ | 77,467 | $ | 78,489 | |||||||
| GAAP research and development as a percentage of revenue | 17 | % | 19 | % | |||||||
| Non-GAAP research and development as a percentage of revenue | 12 | % | 13 | % | |||||||
| GAAP general and administrative | $ | 104,811 | $ | 62,578 | |||||||
| Less: Stock-based compensation | (40,342) | (15,392) | |||||||||
| Less: Employer payroll tax on employee stock transactions | (431) | (485) | |||||||||
| Less: Lease-related impairment and lease-related charges | (399) | — | |||||||||
| Non-GAAP general and administrative | $ | 63,639 | $ | 46,701 | |||||||
| GAAP general and administrative as a percentage of revenue | 16 | % | 11 | % | |||||||
| Non-GAAP general and administrative as a percentage of revenue | 10 | % | 8 | % | |||||||
Reconciliation of income (loss) from operations and operating margin:
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| GAAP loss from operations | $ | (4,651) | $ | (19,226) | |||||||
| Add: Stock-based compensation | 139,752 | 110,723 | |||||||||
| Add: Amortization of acquisition-related intangibles | 5,032 | 5,608 | |||||||||
| Add: Employer payroll tax on employee stock transactions | 4,184 | 5,099 | |||||||||
| Add: Restructuring and other related charges | 28,772 | — | |||||||||
| Add: Lease-related impairment and lease-related charges | 2,676 | — | |||||||||
| Non-GAAP income from operations | $ | 175,765 | $ | 102,204 | |||||||
| GAAP operating margin | (1) | % | (3) | % | |||||||
| Non-GAAP adjustments | 28 | % | 20 | % | |||||||
| Non-GAAP operating margin | 27 | % | 17 | % | |||||||
10
DOCUSIGN, INC.
Reconciliation of net income (loss) and net income (loss) per share, basic and diluted:
| Three Months Ended April 30, | |||||||||||
| (in thousands, except per share data) | 2023 | 2022 | |||||||||
| GAAP net income (loss) | $ | 539 | $ | (27,373) | |||||||
| Add: Stock-based compensation | 139,752 | 110,723 | |||||||||
| Add: Amortization of acquisition-related intangibles | 5,032 | 5,608 | |||||||||
| Add: Employer payroll tax on employee stock transactions | 4,184 | 5,099 | |||||||||
| Add: Amortization of debt discount and issuance costs | 1,604 | 1,284 | |||||||||
| Less: Fair value adjustments to strategic investments | 119 | (340) | |||||||||
| Add: Restructuring and other related charges | 28,772 | — | |||||||||
| Add: Lease-related impairment and lease-related charges | 2,676 | — | |||||||||
| Add: Income tax effect of non-GAAP adjustments | (32,464) | (17,522) | |||||||||
| Non-GAAP net income | $ | 150,214 | $ | 77,479 | |||||||
| Numerator: | |||||||||||
| Non-GAAP net income | $ | 150,214 | $ | 77,479 | |||||||
| Add: Interest expense on convertible senior notes | 357 | (18) | |||||||||
| Non-GAAP net income attributable to common stockholders, diluted | $ | 150,571 | $ | 77,461 | |||||||
| Denominator: | |||||||||||
| Weighted-average common shares outstanding, basic | 202,631 | 199,666 | |||||||||
| Effect of dilutive securities | 5,440 | 6,309 | |||||||||
| Non-GAAP weighted-average common shares outstanding, diluted | 208,071 | 205,975 | |||||||||
| GAAP net income (loss) per share, basic | $ | 0.00 | $ | (0.14) | |||||||
| GAAP net income (loss) per share, diluted | $ | 0.00 | $ | (0.14) | |||||||
| Non-GAAP net income per share, basic | $ | 0.74 | $ | 0.39 | |||||||
| Non-GAAP net income per share, diluted | $ | 0.72 | $ | 0.38 | |||||||
Computation of free cash flow:
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| Net cash provided by operating activities | $ | 233,635 | $ | 196,286 | |||||||
| Less: Purchases of property and equipment | (19,057) | (21,709) | |||||||||
| Non-GAAP free cash flow | $ | 214,578 | $ | 174,577 | |||||||
| Net cash (used in) provided by investing activities | $ | 7,812 | $ | (62,514) | |||||||
| Net cash (used in) provided by financing activities | $ | (20,904) | $ | 1,350 | |||||||
11
DOCUSIGN, INC.
Computation of billings:
| Three Months Ended April 30, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| Revenue | $ | 661,388 | $ | 588,692 | |||||||
| Add: Contract liabilities and refund liability, end of period | 1,210,965 | 1,074,460 | |||||||||
| Less: Contract liabilities and refund liability, beginning of period | (1,191,269) | (1,049,106) | |||||||||
| Add: Contract assets and unbilled accounts receivable, beginning of period | 16,615 | 18,273 | |||||||||
| Less: Contract assets and unbilled accounts receivable, end of period | (22,936) | (18,756) | |||||||||
| Non-GAAP billings | $ | 674,763 | $ | 613,563 | |||||||
12
EXHIBIT 99.2
DOCUSIGN, INC.
DocuSign welcomes American Express executive Anna Marrs to its Board of Directors
New independent director brings significant financial services, digital transformation and risk management expertise
San Francisco, June 8, 2023—DocuSign (NASDAQ:DOCU) today announced the appointment of Anna Marrs to its Board of Directors, effective immediately. Marrs will also join the Board’s Audit Committee.
"Anna brings invaluable expertise to our Board of Directors," said Mary Agnes "Maggie" Wilderotter, Chairman of the Board, DocuSign. "Her senior executive experience leading global financial institutions will enrich our board discussions and strategic decision-making. Anna’s proven leadership and expertise in strategy, operations and risk, combined with a strong track record of driving innovation and digital transformation, aligns perfectly with DocuSign's vision of empowering organizations to modernize their agreement processes. She will play an important role in DocuSign’s ongoing success."
With over 25 years of experience in prominent positions at organizations such as American Express, Standard Chartered Bank and McKinsey & Company, Marrs has been at the forefront of applying technology to reshape financial services and deliver seamless customer experiences. She currently serves as the Group President of Global Commercial Services and Credit & Fraud Risk at American Express where she is responsible for the company’s B2B payments, working capital and AP automation and spend management businesses serving small, mid-sized, large, and global companies around the world. Anna is also a member of American Express’ Executive Committee, which is responsible for developing the company's strategic direction and driving business performance.
"I am thrilled to be joining the Board of Directors at DocuSign, a company that has truly revolutionized how organizations conduct business," said Marrs. "I look forward to working alongside the board members, CEO Allan Thygesen and the talented team at DocuSign as we shape the future of agreements."
Prior to American Express, Marrs served as Standard Chartered’s Regional CEO for ASEAN and South Asia and the head of the bank’s Commercial and Private Banking divisions globally. Before that she spent nearly a decade at McKinsey & Company—most recently as Partner, Banking Practice. She holds an MBA from London Business School and an undergraduate degree from Northwestern University.
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 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).
Media Relations
Megan Gregorio
Investor Relations