SAN
FRANCISCO, March 9, 2023 /PRNewswire/ -- DocuSign,
Inc. (NASDAQ: DOCU), which offers the world's #1 e-signature
product as part of its industry leading lineup, today announced
results for its fourth quarter and fiscal year ended
January 31, 2023.
"We finished the year strong, delivering across our key
financial metrics and making tangible progress on our strategic
priorities. We are reshaping DocuSign to invest in our
innovation roadmap and self-service capabilities," said
Allan Thygesen, CEO of DocuSign.
"Looking ahead, we aim to drive profitable growth at scale by
executing our mission of smarter, easier, and trusted
agreements."
Fourth Quarter Financial Highlights
- Total revenue was $659.6
million, an increase of 14% year-over-year. Subscription
revenue was $643.7 million, an
increase of 14% year-over-year. Professional services and other
revenue was $15.9 million, a decrease
of 5% year-over-year.
- Billings were $739.0
million, an increase of 10% year-over-year.
- GAAP gross margin was 79%, compared to 77% 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 $0.02 on 202 million shares outstanding compared
to a loss of $0.15 on 199 million
shares outstanding in the same period last year.
- GAAP net income per diluted share was $0.02 on 206 million shares outstanding compared
to a loss of $0.15 on 199 million
shares outstanding in the same period last year.
- Non-GAAP net income per diluted share was $0.65 on 206 million shares outstanding compared
to $0.48 on 207 million shares
outstanding in the same period last year.
- Net cash provided by operating activities was
$137.1 million compared to
$87.8 million in the same period last
year.
- Free cash flow was $113.0
million compared to $70.3
million in the same period last year.
- Cash, cash equivalents, restricted cash and investments
were $1.2 billion at the end of the
quarter.
Fiscal 2023 Financial Highlights
- Total revenue was $2.5
billion, an increase of 19% year-over-year. Subscription
revenue was $2.4 billion, an increase
of 20% year-over-year. Professional services and other revenue was
$73.7 million, an increase of 5%
year-over-year.
- Billings were $2.7
billion, an increase of 13% year-over-year.
- GAAP gross margin was 79%, compared to 78% in fiscal
2022. Non-GAAP gross margin was 82% for both periods.
- GAAP net loss per basic and diluted share was
$0.49 on 201 million shares
outstanding compared to $0.36 on 197
million shares outstanding in fiscal 2022.
- Non-GAAP net income per diluted share was $2.03 on 206 million shares outstanding compared
to $1.98 on 208 million shares
outstanding in fiscal 2022.
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
new key leaders:
-
- Robert Chatwani as President
& General Manager, Growth. Prior to joining DocuSign, Robert
was at Atlassian where he served as Chief Marketing Officer. Prior
to Atlassian, Robert served as Chief Revenue & Marketing
Officer for social e-commerce platform Spring. He also spent more
than a decade at eBay, ending his tenure as CMO of North America.
- Anwar Akram as Chief Operating
Officer. Anwar joins DocuSign from Google where he was most
recently VP of Operational Effectiveness leading cross-functional
initiatives to improve operational productivity. Prior to Google,
Anwar also held executive and leadership roles at Microsoft and
McKinsey & Company.
- Named Customers' Choice in 2022 Gartner® Peer Insights™
'Voice of the Customer': Electronic Signature. DocuSign
was recognized by customers on Gartner Peer Insights as a
Customers' Choice in the December
2022 Gartner Peer Insights 'Voice of the Customer':
Electronic Signature. Of the 12 solutions included, DocuSign had
the highest number of reviews and is the only e-signature vendor
recognized with the Gartner Peer Insights Customers' Choice
distinction for meeting or exceeding both the market average for
Overall Experience and User Interest and Adoption.
Outlook
The company currently expects the following guidance:
▪ Quarter ending
April 30, 2023 (in millions, except percentages):
|
Total
Revenue
|
|
|
|
|
|
|
|
|
|
$639
|
to
|
$643
|
Subscription
revenue
|
|
|
|
|
|
|
|
|
|
$625
|
to
|
$629
|
Billings
|
|
|
|
|
|
|
|
|
|
$615
|
to
|
$625
|
Non-GAAP gross
margin
|
|
|
|
|
|
|
|
|
|
81 %
|
to
|
82 %
|
Non-GAAP operating
margin
|
|
|
|
|
|
|
|
|
|
21 %
|
to
|
22 %
|
Non-GAAP diluted
weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
207
|
to
|
212
|
|
|
▪ Fiscal year ending
January 31, 2024 (in millions, except
percentages):
|
Total
revenue
|
|
|
|
|
|
|
|
|
|
$2,695
|
to
|
$2,707
|
Subscription
revenue
|
|
|
|
|
|
|
|
|
|
$2,633
|
to
|
$2,645
|
Billings
|
|
|
|
|
|
|
|
|
|
$2,705
|
to
|
$2,725
|
Non-GAAP gross
margin
|
|
|
|
|
|
|
|
|
|
81 %
|
to
|
82 %
|
Non-GAAP operating
margin
|
|
|
|
|
|
|
|
|
|
21 %
|
to
|
23 %
|
Non-GAAP diluted
weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
207
|
to
|
212
|
The company has not reconciled its guidance of non-GAAP
financial measures to the corresponding GAAP measures because
stock-based compensation expense cannot be reasonably calculated or
predicted at this time. Accordingly, a reconciliation has not been
provided.
Webcast Conference Call Information
The company will host a conference call on March 9, 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) March 23, 2023, using the passcode 13736321.
About DocuSign
DocuSign helps organizations connect and automate how they
navigate their systems of agreement. As part of its industry
leading product lineup, DocuSign offers eSignature, the world's #1
way to sign electronically on practically any device, from almost
anywhere, at any time. Today, over 1.3 million customers and more
than a billion users in over 180 countries use the DocuSign
platform to accelerate the process of doing business and simplify
people's lives. For more information, visit
http://www.docusign.com.
Copyright 2022. DocuSign, Inc. is the owner of DOCUSIGN® and all
its other marks (www.docusign.com/IP).
Investor Relations:
DocuSign Investor Relations
investors@docusign.com
Media Relations:
DocuSign Corporate Communications
media@docusign.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which statements involve substantial risk and
uncertainties. All statements contained in this press release other
than statements of historical fact, including statements regarding
our future operating results and financial position, our business
strategy and plans, market growth and trends, objectives for future
operations, and the impact of such assumptions on our financial
conditions 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 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 expand 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 and existing information
technology systems, including our ERP system; and our ability to
maintain proper and effective internal controls.
In addition, statements such as "we believe" and similar
statements reflect our beliefs and opinions on the relevant
subject. These statements are based upon information available to
us as of the date of this press release, and while we believe such
information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should
not be read to indicate that we have conducted an exhaustive
inquiry into, or review of, all potentially available relevant
information. These statements are inherently uncertain, and
investors are cautioned not to unduly rely upon these
statements.
You should not rely upon forward-looking statements as
predictions of future events. We have based the forward-looking
statements contained in this press release primarily on our current
expectations and projections about future events and trends that we
believe may affect our business, financial condition, results of
operations, and prospects. 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
quarterly report on Form 10-Q for the quarter ended October 31, 2022 filed on December 8, 2022 with the Securities and Exchange
Commission (the "SEC"), and other filings that we make from time to
time with the SEC. Moreover, we operate in a very competitive
and rapidly changing environment. New risks and uncertainties
emerge from time to time. It is not possible for us to predict all
risks and uncertainties that could have an impact on the
forward-looking statements contained in this press release. We
cannot assure you that the results, events, and circumstances
reflected in the forward-looking statements will be achieved or
occur, and actual results, events, or circumstances could differ
materially from those described in the forward-looking statements.
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, acquisition-related expenses,
fair value adjustments to strategic investments, executive
transition costs, lease-related impairment and lease-related
charges, restructuring and other related charges, tax impact
related to an intercompany IP transfer, as these costs are not
reflective of ongoing operations and, as applicable, other special
items. The amount of employer payroll tax-related items on employee
stock transactions is dependent on our stock price and other
factors that are beyond our control and do not correlate to the
operation of the business. When evaluating the performance of our
business and making operating plans, we do not consider these items
(for example, when considering the impact of equity award grants,
we place a greater emphasis on overall stockholder dilution rather
than the accounting charges associated with such grants). We
believe it is useful to exclude these expenses in order to better
understand the long-term performance of our core business and to
facilitate comparison of our results to those of peer companies and
over multiple periods. In addition to these exclusions, we subtract
an assumed provision for income taxes to calculate non-GAAP net
income. We utilize a fixed long-term projected tax rate in our
computation of the non-GAAP income tax provision to provide better
consistency across the reporting periods. For fiscal 2023, we
determined the projected non-GAAP tax rate to be 20%.
Free cash flow: We define free cash flow as net
cash provided by operating activities less purchases of
property and equipment. We believe free cash flow is an
important liquidity measure of the cash that is available (if any),
after purchases of property and equipment, for operational
expenses, investment in our business, and to make acquisitions.
Free cash flow is useful to investors as a liquidity measure
because it measures our ability to generate or use cash in excess
of our capital investments in property and equipment. Once our
business needs and obligations are met, cash can be used to
maintain a strong balance sheet and invest in future growth.
Billings: We define billings as total revenues plus the
change in our contract liabilities and refund liability less
contract assets and unbilled accounts receivable in a given period.
Billings reflects sales to new customers plus subscription renewals
and additional sales to existing customers. Only amounts invoiced
to a customer in a given period are included in billings. We
believe billings is a key metric to measure our periodic
performance. Given that most of our customers pay in annual
installments one year in advance, but we typically recognize a
majority of the related revenue ratably over time, we use billings
to measure and monitor our ability to provide our business with the
working capital generated by upfront payments from our
customers.
For a reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measure, please see
"Reconciliation of GAAP to Non-GAAP Financial Measures" below.
CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
643,677
|
|
$
564,006
|
|
$
2,442,177
|
|
$
2,037,272
|
Professional services
and other
|
15,899
|
|
16,822
|
|
73,738
|
|
69,941
|
Total
revenue
|
659,576
|
|
580,828
|
|
2,515,915
|
|
2,107,213
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
110,463
|
|
96,556
|
|
426,077
|
|
343,661
|
Professional services
and other
|
26,963
|
|
34,898
|
|
110,011
|
|
122,790
|
Total cost of
revenue
|
137,426
|
|
131,454
|
|
536,088
|
|
466,451
|
Gross profit
|
522,150
|
|
449,374
|
|
1,979,827
|
|
1,640,762
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
304,649
|
|
299,417
|
|
1,242,711
|
|
1,076,527
|
Research and
development
|
125,891
|
|
110,692
|
|
480,584
|
|
393,362
|
General and
administrative
|
91,641
|
|
64,443
|
|
316,228
|
|
232,757
|
Restructuring and
other related charges
|
253
|
|
—
|
|
28,335
|
|
—
|
Total operating
expenses
|
522,434
|
|
474,552
|
|
2,067,858
|
|
1,702,646
|
Loss from
operations
|
(284)
|
|
(25,178)
|
|
(88,031)
|
|
(61,884)
|
Interest
expense
|
(1,652)
|
|
(1,617)
|
|
(6,389)
|
|
(6,443)
|
Interest income and
other income (expense), net
|
7,366
|
|
(2,621)
|
|
4,539
|
|
1,413
|
Income (loss)
before provision for income taxes
|
5,430
|
|
(29,416)
|
|
(89,881)
|
|
(66,914)
|
Provision for income
taxes
|
567
|
|
1,029
|
|
7,573
|
|
3,062
|
Net income
(loss)
|
$ 4,863
|
|
$
(30,445)
|
|
$
(97,454)
|
|
$
(69,976)
|
Net income (loss) per
share attributable to common stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
0.02
|
|
$
(0.15)
|
|
$
(0.49)
|
|
$
(0.36)
|
Diluted
|
$
0.02
|
|
$
(0.15)
|
|
$
(0.49)
|
|
$
(0.36)
|
Weighted-average number
of shares used in computing net
income (loss) per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
201,894
|
|
198,687
|
|
200,903
|
|
196,675
|
Diluted
|
206,260
|
|
198,687
|
|
200,903
|
|
196,675
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$ 11,644
|
|
$ 9,500
|
|
$ 46,916
|
|
$ 31,152
|
Cost of
revenue—professional services and other
|
7,431
|
|
8,096
|
|
25,758
|
|
27,347
|
Sales and
marketing
|
55,760
|
|
52,040
|
|
222,334
|
|
186,759
|
Research and
development
|
41,278
|
|
31,712
|
|
149,967
|
|
108,523
|
General and
administrative
|
29,810
|
|
16,659
|
|
88,125
|
|
54,761
|
Restructuring and other
related charges
|
36
|
|
—
|
|
5,626
|
|
—
|
CONDENSED
CONSOLIDATED BALANCE
SHEETS (Unaudited)
|
|
(in
thousands)
|
January 31,
2023
|
|
January 31,
2022
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
721,895
|
|
$
509,059
|
Investments—current
|
309,771
|
|
293,763
|
Accounts receivable,
net
|
516,914
|
|
440,950
|
Contract
assets—current
|
12,437
|
|
12,588
|
Prepaid expenses and
other current assets
|
69,987
|
|
63,236
|
Total current
assets
|
1,631,004
|
|
1,319,596
|
Investments—noncurrent
|
186,049
|
|
94,938
|
Property and equipment,
net
|
199,892
|
|
184,664
|
Operating lease
right-of-use assets
|
141,493
|
|
126,021
|
Goodwill
|
353,619
|
|
355,058
|
Intangible assets,
net
|
70,280
|
|
98,816
|
Deferred contract
acquisition costs—noncurrent
|
350,899
|
|
311,835
|
Other
assets—noncurrent
|
79,484
|
|
50,337
|
Total
assets
|
$
3,012,720
|
|
$
2,541,265
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
24,393
|
|
$
52,804
|
Accrued expenses and
other current liabilities
|
100,987
|
|
91,377
|
Accrued
compensation
|
163,133
|
|
160,163
|
Convertible senior
notes—current
|
722,887
|
|
—
|
Contract
liabilities—current
|
1,172,867
|
|
1,029,891
|
Operating lease
liabilities—current
|
24,055
|
|
37,404
|
Total current
liabilities
|
2,208,322
|
|
1,371,639
|
Convertible senior
notes, net—noncurrent
|
—
|
|
718,487
|
Contract
liabilities—noncurrent
|
16,925
|
|
16,725
|
Operating lease
liabilities—noncurrent
|
141,348
|
|
126,340
|
Deferred tax
liability—noncurrent
|
10,723
|
|
9,316
|
Other
liabilities—noncurrent
|
18,115
|
|
23,255
|
Total
liabilities
|
2,395,433
|
|
2,265,762
|
Stockholders'
equity
|
|
|
|
Common
stock
|
20
|
|
20
|
Treasury
stock
|
(1,785)
|
|
(1,532)
|
Additional paid-in
capital
|
2,240,732
|
|
1,720,013
|
Accumulated other
comprehensive loss
|
(22,996)
|
|
(4,809)
|
Accumulated
deficit
|
(1,598,684)
|
|
(1,438,189)
|
Total stockholders'
equity
|
617,287
|
|
275,503
|
Total liabilities
and equity
|
$
3,012,720
|
|
$
2,541,265
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
4,863
|
|
$
(30,445)
|
|
$
(97,454)
|
|
$
(69,976)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
22,279
|
|
20,750
|
|
86,255
|
|
81,913
|
Amortization of
deferred contract acquisition and fulfillment costs
|
50,664
|
|
43,683
|
|
185,045
|
|
144,442
|
Amortization of debt
discount and transaction costs
|
1,245
|
|
1,250
|
|
4,970
|
|
5,098
|
Non-cash operating
lease costs
|
7,033
|
|
6,643
|
|
27,501
|
|
26,819
|
Stock-based
compensation expense
|
145,961
|
|
118,006
|
|
538,726
|
|
408,542
|
Deferred income
taxes
|
(1,348)
|
|
3,729
|
|
1,697
|
|
1,369
|
Other
|
2,183
|
|
4,274
|
|
15,723
|
|
9,871
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
(94,302)
|
|
(135,349)
|
|
(75,964)
|
|
(117,380)
|
Prepaid expenses and
other current assets
|
2,555
|
|
5,816
|
|
(5,038)
|
|
(7,074)
|
Deferred contract
acquisition and fulfillment costs
|
(70,695)
|
|
(59,447)
|
|
(232,315)
|
|
(207,393)
|
Other
assets
|
(6,612)
|
|
(206)
|
|
(22,319)
|
|
(11,496)
|
Accounts
payable
|
(24,701)
|
|
5,445
|
|
(26,440)
|
|
12,148
|
Accrued expenses and
other liabilities
|
6,467
|
|
(1,058)
|
|
7,340
|
|
10,828
|
Accrued
compensation
|
14,046
|
|
23,909
|
|
(1,781)
|
|
1,128
|
Contract
liabilities
|
86,353
|
|
89,435
|
|
143,177
|
|
250,482
|
Operating lease
liabilities
|
(8,934)
|
|
(8,642)
|
|
(42,364)
|
|
(32,854)
|
Net cash provided by
operating activities
|
137,057
|
|
87,793
|
|
506,759
|
|
506,467
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash paid for
acquisition, net of acquired cash
|
—
|
|
—
|
|
—
|
|
(6,388)
|
Purchases of marketable
securities
|
(131,461)
|
|
(81,366)
|
|
(533,710)
|
|
(384,128)
|
Sales of marketable
securities
|
—
|
|
4,499
|
|
—
|
|
7,569
|
Maturities of
marketable securities
|
112,148
|
|
90,113
|
|
423,917
|
|
283,184
|
Purchases of strategic
and other investments
|
(125)
|
|
(1,000)
|
|
(3,750)
|
|
(1,750)
|
Purchases of property
and equipment
|
(24,064)
|
|
(17,470)
|
|
(77,654)
|
|
(61,396)
|
Net cash used in
investing activities
|
(43,502)
|
|
(5,224)
|
|
(191,197)
|
|
(162,909)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repayments of
convertible senior notes
|
—
|
|
(13,071)
|
|
(16)
|
|
(77,906)
|
Repurchases of common
stock
|
—
|
|
—
|
|
(63,041)
|
|
—
|
Payment of tax
withholding obligation on RSU settlement and ESPP
purchase
|
(17,283)
|
|
(63,412)
|
|
(84,403)
|
|
(386,521)
|
Proceeds from exercise
of stock options
|
1,669
|
|
2,553
|
|
12,678
|
|
23,729
|
Proceeds from employee
stock purchase plan
|
—
|
|
—
|
|
36,526
|
|
46,077
|
Net cash used in
financing activities
|
(15,614)
|
|
(73,930)
|
|
(98,256)
|
|
(394,621)
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
10,868
|
|
(3,122)
|
|
(3,784)
|
|
(5,594)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
88,809
|
|
5,517
|
|
213,522
|
|
(56,657)
|
Cash, cash equivalents
and restricted cash at beginning of period
(1)
|
634,392
|
|
504,162
|
|
509,679
|
|
566,336
|
Cash, cash equivalents
and restricted cash at end of period (1)
|
$
723,201
|
|
$
509,679
|
|
$
723,201
|
|
$
509,679
|
(1) Cash, cash
equivalents and restricted cash included restricted cash of $1.3
million and $0.6 million as of January 31, 2023 and
January 31, 2022.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL
MEASURES (Unaudited)
|
|
Reconciliation of
gross profit and gross margin:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP gross
profit
|
$
522,150
|
|
$
449,374
|
|
$ 1,979,827
|
|
$ 1,640,762
|
Add: Stock-based
compensation
|
19,075
|
|
17,596
|
|
72,674
|
|
58,499
|
Add: Amortization of
acquisition-related intangibles
|
2,382
|
|
2,403
|
|
9,613
|
|
11,670
|
Add: Employer payroll
tax on employee stock transactions
|
392
|
|
829
|
|
2,184
|
|
7,524
|
Add: Lease-related
impairment and lease-related charges
|
412
|
|
—
|
|
1,090
|
|
—
|
Non-GAAP gross
profit
|
$
544,411
|
|
$
470,202
|
|
$ 2,065,388
|
|
$ 1,718,455
|
GAAP gross
margin
|
79 %
|
|
77 %
|
|
79 %
|
|
78 %
|
Non-GAAP
adjustments
|
4 %
|
|
4 %
|
|
3 %
|
|
4 %
|
Non-GAAP gross
margin
|
83 %
|
|
81 %
|
|
82 %
|
|
82 %
|
|
|
|
|
|
|
|
|
GAAP subscription gross
profit
|
$
533,214
|
|
$
467,450
|
|
$ 2,016,100
|
|
$ 1,693,611
|
Add: Stock-based
compensation
|
11,644
|
|
9,500
|
|
46,916
|
|
31,152
|
Add: Amortization of
acquisition-related intangibles
|
2,382
|
|
2,403
|
|
9,613
|
|
11,670
|
Add: Employer payroll
tax on employee stock transactions
|
243
|
|
417
|
|
1,393
|
|
3,703
|
Add: Lease-related
impairment and lease-related charges
|
126
|
|
—
|
|
447
|
|
—
|
Non-GAAP subscription
gross profit
|
$
547,609
|
|
$
479,770
|
|
$ 2,074,469
|
|
$ 1,740,136
|
GAAP subscription gross
margin
|
83 %
|
|
83 %
|
|
83 %
|
|
83 %
|
Non-GAAP
adjustments
|
2 %
|
|
2 %
|
|
2 %
|
|
2 %
|
Non-GAAP subscription
gross margin
|
85 %
|
|
85 %
|
|
85 %
|
|
85 %
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$ (11,064)
|
|
$ (18,076)
|
|
$
(36,273)
|
|
$
(52,849)
|
Add: Stock-based
compensation
|
7,431
|
|
8,096
|
|
25,758
|
|
27,347
|
Add: Employer payroll
tax on employee stock transactions
|
149
|
|
412
|
|
791
|
|
3,821
|
Add: Lease-related
impairment and lease-related charges
|
286
|
|
—
|
|
643
|
|
—
|
Non-GAAP professional
services and other gross loss
|
$
(3,198)
|
|
$
(9,568)
|
|
$ (9,081)
|
|
$
(21,681)
|
GAAP professional
services and other gross margin
|
(70) %
|
|
(107) %
|
|
(49) %
|
|
(76) %
|
Non-GAAP
adjustments
|
50 %
|
|
50 %
|
|
37 %
|
|
45 %
|
Non-GAAP professional
services and other gross margin
|
(20) %
|
|
(57) %
|
|
(12) %
|
|
(31) %
|
Reconciliation of
operating expenses:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP sales and
marketing
|
$
304,649
|
|
$
299,417
|
|
$ 1,242,711
|
|
$ 1,076,527
|
Less: Stock-based
compensation
|
(55,760)
|
|
(52,040)
|
|
(222,334)
|
|
(186,759)
|
Less: Amortization of
acquisition-related intangibles
|
(2,571)
|
|
(3,205)
|
|
(11,093)
|
|
(13,100)
|
Less: Employer payroll
tax on employee stock transactions
|
(910)
|
|
(1,960)
|
|
(6,160)
|
|
(19,628)
|
Less: Lease-related
impairment and lease-related charges
|
(1,467)
|
|
—
|
|
(3,820)
|
|
—
|
Non-GAAP sales and
marketing
|
$
243,941
|
|
$
242,212
|
|
$
999,304
|
|
$
857,040
|
GAAP sales and
marketing as a percentage of revenue
|
46 %
|
|
52 %
|
|
49 %
|
|
51 %
|
Non-GAAP sales and
marketing as a percentage of revenue
|
37 %
|
|
42 %
|
|
40 %
|
|
41 %
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
125,891
|
|
$
110,692
|
|
$
480,584
|
|
$
393,362
|
Less: Stock-based
compensation
|
(41,278)
|
|
(31,712)
|
|
(149,967)
|
|
(108,523)
|
Less: Employer payroll
tax on employee stock transactions
|
(460)
|
|
(1,097)
|
|
(3,469)
|
|
(10,341)
|
Less: Lease-related
impairment and lease-related charges
|
(433)
|
|
—
|
|
(1,252)
|
|
—
|
Non-GAAP research and
development
|
$
83,720
|
|
$
77,883
|
|
$
325,896
|
|
$
274,498
|
GAAP research and
development as a percentage of revenue
|
19 %
|
|
19 %
|
|
19 %
|
|
19 %
|
Non-GAAP research and
development as a percentage of revenue
|
13 %
|
|
13 %
|
|
13 %
|
|
13 %
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
91,641
|
|
$
64,443
|
|
$
316,228
|
|
$
232,757
|
Less: Stock-based
compensation
|
(29,810)
|
|
(16,659)
|
|
(88,125)
|
|
(54,761)
|
Less: Employer payroll
tax on employee stock transactions
|
(182)
|
|
(334)
|
|
(1,108)
|
|
(4,699)
|
Less:
Acquisition-related expenses
|
—
|
|
—
|
|
—
|
|
(387)
|
Less: Lease-related
impairment and lease-related charges
|
(364)
|
|
(1,207)
|
|
(1,019)
|
|
(5,099)
|
Less: Executive
transition costs
|
—
|
|
—
|
|
(2,634)
|
|
—
|
Non-GAAP general and
administrative
|
$
61,285
|
|
$
46,243
|
|
$
223,342
|
|
$
167,811
|
GAAP general and
administrative as a percentage of revenue
|
14 %
|
|
10 %
|
|
13 %
|
|
11 %
|
Non-GAAP general and
administrative as a percentage of revenue
|
9 %
|
|
8 %
|
|
9 %
|
|
8 %
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP loss from
operations
|
$ (284)
|
|
$ (25,178)
|
|
$ (88,031)
|
|
$ (61,884)
|
Add: Stock-based
compensation
|
145,923
|
|
118,007
|
|
533,100
|
|
408,542
|
Add: Amortization of
acquisition-related intangibles
|
4,953
|
|
5,608
|
|
20,706
|
|
24,770
|
Add: Employer payroll
tax on employee stock transactions
|
1,944
|
|
4,220
|
|
12,921
|
|
42,192
|
Add:
Acquisition-related expenses
|
—
|
|
—
|
|
—
|
|
387
|
Add: Lease-related
impairment and lease-related charges
|
2,676
|
|
1,207
|
|
7,181
|
|
5,099
|
Add: Restructuring and
other related charges
|
253
|
|
—
|
|
28,335
|
|
—
|
Add: Executive
transition costs
|
—
|
|
—
|
|
2,634
|
|
—
|
Non-GAAP income from
operations
|
$
155,465
|
|
$
103,864
|
|
$
516,846
|
|
$
419,106
|
GAAP operating
margin
|
— %
|
|
(4) %
|
|
(3) %
|
|
(3) %
|
Non-GAAP
adjustments
|
24 %
|
|
22 %
|
|
24 %
|
|
23 %
|
Non-GAAP operating
margin
|
24 %
|
|
18 %
|
|
21 %
|
|
20 %
|
Reconciliation of
net income (loss) and net income (loss) per share, basic and
diluted:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net income
(loss)
|
$ 4,863
|
|
$
(30,445)
|
|
$
(97,454)
|
|
$
(69,976)
|
Add: Stock-based
compensation
|
145,923
|
|
118,007
|
|
533,100
|
|
408,542
|
Add: Amortization of
acquisition-related intangibles
|
4,953
|
|
5,608
|
|
20,706
|
|
24,770
|
Add: Employer payroll
tax on employee stock transactions
|
1,944
|
|
4,220
|
|
12,921
|
|
42,192
|
Add:
Acquisition-related expenses
|
—
|
|
—
|
|
—
|
|
387
|
Add: Amortization of
debt discount and issuance costs
|
1,291
|
|
1,250
|
|
4,970
|
|
5,098
|
Less: Fair value
adjustments to strategic investments
|
4,073
|
|
—
|
|
3,689
|
|
(5,270)
|
Add: Lease-related
impairment and lease-related charges
|
2,676
|
|
1,207
|
|
7,181
|
|
5,099
|
Add: Restructuring and
other related charges
|
253
|
|
—
|
|
28,335
|
|
—
|
Add: Executive
transition costs
|
—
|
|
—
|
|
2,634
|
|
—
|
Add: Income Tax effect
of non-GAAP adjustments(1)
|
(32,742)
|
|
—
|
|
(97,158)
|
|
—
|
Non-GAAP net
income
|
$
133,234
|
|
$ 99,847
|
|
$
418,924
|
|
$
410,842
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
133,234
|
|
$ 99,847
|
|
$
418,924
|
|
$
410,842
|
Add: Interest expense
on convertible senior notes
|
46
|
|
25
|
|
29
|
|
37
|
Non-GAAP net income
attributable to common stockholders, diluted
|
$
133,280
|
|
$ 99,872
|
|
$
418,953
|
|
$
410,879
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding, basic
|
201,894
|
|
198,687
|
|
200,903
|
|
196,675
|
Effect of dilutive
securities
|
4,366
|
|
8,474
|
|
5,595
|
|
11,322
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
206,260
|
|
207,161
|
|
206,498
|
|
207,997
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
per share, basic
|
$
0.02
|
|
$
(0.15)
|
|
$
(0.49)
|
|
$
(0.36)
|
GAAP net income (loss)
per share, diluted
|
$
0.02
|
|
$
(0.15)
|
|
$
(0.49)
|
|
$
(0.36)
|
Non-GAAP net income
per share, basic
|
$
0.66
|
|
$
0.50
|
|
$
2.09
|
|
$
2.09
|
Non-GAAP net income
per share, diluted
|
$
0.65
|
|
$
0.48
|
|
$
2.03
|
|
$
1.98
|
(1)
Represents the income tax adjustment using our estimated non-GAAP
tax rate of 20%. Estimating a non-GAAP tax rate of 20%,
the income tax effect of non-GAAP adjustments was $19.1 million for
the three months ended January 31, 2022 and $79.7 million
for the year ended January 31, 2022.
|
Computation of free
cash flow:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
137,057
|
|
$ 87,793
|
|
$
506,759
|
|
$
506,467
|
Less: Purchases of
property and equipment
|
(24,064)
|
|
(17,470)
|
|
(77,654)
|
|
(61,396)
|
Non-GAAP free cash
flow
|
112,993
|
|
70,323
|
|
429,105
|
|
445,071
|
Net cash (used in)
provided by investing activities
|
(43,502)
|
|
(5,224)
|
|
(191,197)
|
|
(162,909)
|
Net cash used in
financing activities
|
$
(15,614)
|
|
$
(73,930)
|
|
$
(98,256)
|
|
$ (394,621)
|
Computation of
billings:
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
659,576
|
|
$
580,828
|
|
$
2,515,915
|
|
$
2,107,213
|
Add: Contract
liabilities and refund liability, end of period
|
1,191,269
|
|
1,049,106
|
|
1,191,269
|
|
1,049,106
|
Less: Contract
liabilities and refund liability, beginning of period
|
(1,113,131)
|
|
(961,243)
|
|
(1,049,106)
|
|
(800,940)
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
17,945
|
|
19,708
|
|
18,273
|
|
21,021
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(16,615)
|
|
(18,273)
|
|
(16,615)
|
|
(18,273)
|
Non-GAAP
billings
|
$
739,044
|
|
$
670,126
|
|
$
2,659,736
|
|
$
2,358,127
|
View original
content:https://www.prnewswire.com/news-releases/docusign-announces-fourth-quarter-and-fiscal-year-2023-financial-results-301768434.html
SOURCE DocuSign, Inc.