SAN FRANCISCO, March 12,
2020 /PRNewswire/ -- DocuSign, Inc. (NASDAQ: DOCU), which
offers the world's #1 eSignature solution as part of the DocuSign
Agreement Cloud, today announced results for its fourth quarter and
fiscal year ended.
"The fourth quarter wrapped up an exceptional year for
DocuSign," said Dan Springer, CEO of
DocuSign. "Since introducing the DocuSign Agreement Cloud a year
ago, we have dramatically broadened our offerings while maintaining
strong growth from eSignature. With our latest move—the proposed
acquisition of contracts AI pioneer Seal Software—we are continuing
our drive to make organizations' end-to-end agreement processes
faster, simpler, and smarter."
Fourth Quarter Financial Highlights
- Total revenue was $274.9
million, an increase of 38% year-over-year. Subscription
revenue was $258.1 million, an
increase of 38% year-over-year. Professional services and other
revenue was $16.8 million, an
increase of 38% year-over-year.
- Billings were $366.9
million, an increase of 40% year-over-year.
- GAAP gross margin was 75%, compared to 74% in the same
period last year. Non-GAAP gross margin was 79% compared to 78% in
the same period last year.
- GAAP net loss per basic and diluted share was
$0.26 on 181 million shares
outstanding compared to $0.40 on 167
million shares outstanding in the same period last year.
- Non-GAAP net income per diluted share was $0.12 on 194 million shares outstanding compared
to $0.06 on 188 million shares
outstanding in the same period last year.
- Net cash provided by operating activities was
$45.5 million compared to
$34.1 million in the same period last
year.
- Free cash flow was $15.5
million compared to $22.8
million in the same period last year.
- Cash, cash equivalents, restricted cash and investments
were $896.2 million at the end of the
quarter.
Fiscal 2020 Financial Highlights
- Total revenue was $974.0
million, an increase of 39% year-over-year. Subscription
revenue was $918.5 million, an
increase of 38% year-over-year. Professional services and other
revenue was $55.5 million, an
increase of 49% year-over-year.
- Billings were $1.1
billion, an increase of 38% year-over-year.
- GAAP gross margin was 75%, compared to 73% in fiscal
2019. Non-GAAP gross margin was 79% compared to 80% in fiscal
2019.
- GAAP net loss per basic and diluted share was
$1.18 on 177 million shares
outstanding compared to $3.16 on 135
million shares outstanding in fiscal 2019.
- Non-GAAP net income per diluted share was $0.31 on 191 million shares outstanding compared
to $0.09 on 159 million shares
outstanding in fiscal 2019.
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
- Seal Software acquisition. Reflecting the increasingly
important role that artificial intelligence ("AI") will play in the
digital transformation of the agreement process, DocuSign announced
its intent to acquire contracts AI and legal analytics pioneer Seal
Software for $188 million in cash.
This acquisition enables DocuSign to integrate Seal's AI technology
across the entire Agreement Cloud—and therefore deliver greater
value to organizations looking to prepare, sign, act-on and manage
the agreements that are critical to their business.
- DocuSign Momentum. The company hosted its North American
customer conference on March 4, 2020.
Given the ongoing developments around the COVID-19 (coronavirus)
situation, the company took the proactive step to hold the
conference virtually. The company showcased AI-powered capabilities
by Seal Software and DocuSign's internal AI team, as well as other
new capabilities for every stage of the agreement process.
- Executive appointments. DocuSign announced Rob Giglio as the company's new chief marketing
officer (CMO). Rob was previously with Adobe, where he helped
architect the growth strategy for Adobe's self-service cloud
business and oversaw significant international expansion. As CMO,
Rob will own all demand generation, self-service sales, digital,
creative, and brand functions for DocuSign.
Outlook
The company currently expects the following guidance:
|
▪ Quarter
ending April 30, 2020 (in millions, except
percentages):
|
|
|
|
|
Total
revenue
|
$280
|
to
|
$284
|
|
Subscription
revenue
|
$266
|
to
|
$270
|
|
Billings
|
$279
|
to
|
$289
|
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
|
Non-GAAP sales and
marketing
|
47%
|
to
|
49%
|
|
Non-GAAP research and
development
|
13%
|
to
|
15%
|
|
Non-GAAP general and
administrative
|
9%
|
to
|
11%
|
|
Non-GAAP interest and
other income (expense)
|
$2
|
to
|
$3
|
|
Provision for income
taxes
|
$1.5
|
to
|
$2.5
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
195
|
to
|
200
|
|
|
|
|
|
▪ Fiscal
year ending January 31, 2021 (in millions, except
percentages):
|
|
|
|
|
Total
revenue
|
$1,272
|
to
|
$1,276
|
|
Subscription
revenue
|
$1,210
|
to
|
$1,214
|
|
Billings
|
$1,430
|
to
|
$1,450
|
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
|
Non-GAAP sales and
marketing
|
47%
|
to
|
49%
|
|
Non-GAAP research and
development
|
13%
|
to
|
15%
|
|
Non-GAAP general and
administrative
|
9%
|
to
|
11%
|
|
Non-GAAP interest and
other income (expense)
|
$8
|
to
|
$12
|
|
Provision for income
taxes
|
$6
|
to
|
$10
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
195
|
to
|
200
|
The company has not reconciled its expectations 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 is not
available without unreasonable effort.
Webcast Conference Call Information
The company will host a conference call on March 12, 2020
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 26, 2020, using the passcode 13699284.
About DocuSign
DocuSign helps organizations connect and automate how they
prepare, sign, act on, and manage agreements. As part of the
DocuSign Agreement Cloud, DocuSign offers eSignature, the world's
#1 way to sign electronically on practically any device, from
almost anywhere, at any time. Today, more than half a million
customers and hundreds of millions of users in over 180 countries
use DocuSign to accelerate the process of doing business and to
simplify people's lives.
For more information, visit www.docusign.com, call
+1-877-720-2040, or follow @DocuSign on Twitter, LinkedIn, Facebook
and Instagram.
Copyright 2020. DocuSign, Inc. is the owner of DOCUSIGN® and all
its other marks (www.docusign.com/IP).
Investor Relations:
Annie
Leschin
VP Investor Relations
investors@docusign.com
Media Relations:
Adrian
Wainwright
Head of Communications
media@docusign.com
Forward-Looking Statements
This press release contains forward-looking statements that are
based on our management's beliefs and assumptions and on
information currently available to management. Forward-looking
statements include all statements that are not historical facts and
can be identified by terms 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 in this
press release 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 the benefits of the DocuSign Agreement
Cloud and enhancements to it, additions to the Agreement Cloud
suite of products, and the anticipated benefits of the
acquisition of Seal Software. They also include statements about
our future operating results and financial position, our business
strategy and plans, market growth and trends, and our objectives
for future operations. These statements are subject to substantial
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements.
These risks and uncertainties include, among other things, risks
related to our ability to estimate the size of our total
addressable market; our ability to effectively sustain and manage
our growth and future expenses, achieve and maintain future
profitability, attract new customers and maintain and expand our
existing customer base; our ability to scale and update our
platform to respond to customers' needs and rapid technological
change; the effects of increased competition in our market and our
ability to compete effectively; 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
relationship 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; our ability to successfully integrate the
operations of businesses we may acquire, or to realize the
anticipated benefits of such acquisitions; our ability to maintain,
protect and enhance our brand; the sufficiency of our cash and cash
equivalents to satisfy our liquidity needs; our failure or the
failure of our software suite of services 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; our
ability to estimate the size and potential growth of our target
market; 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 quarterly report on
Form 10-Q for the quarter ended October 31,
2019 filed on December 6, 2019
with the Securities and Exchange Commission (the "SEC"), and other
filings that we make from time to time with the SEC. In addition,
any forward-looking statements contained in this press release are
based on assumptions that we believe to be reasonable as of this
date. Except as required by law, we assume no obligation to update
these forward-looking statements, or to update the reasons if
actual results differ materially from those anticipated in the
forward-looking statements.
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 are presenting 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.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP income (loss) from operations,
non-GAAP operating margin, non-GAAP net income (loss) and non-GAAP
net income (loss) 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 from
our convertible senior notes issued in September 2018, 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.
Free cash flows: We define free cash flow as net
cash provided by (used in) operating activities less purchases
of property and equipment. We believe free cash flow is an
important liquidity measure of the cash (if any) that is available,
after purchases of property and equipment, for operational
expenses, investment in our business, and to make acquisitions.
Free cash flow is useful to investors as a liquidity measure
because it measures our ability to generate or use cash in excess
of our capital investments in property and equipment. Once our
business needs and obligations are met, cash can be used to
maintain a strong balance sheet and invest in future growth.
Billings: We define billings as total revenues plus the
change in our contract liabilities and refund liability less
contract assets and unbilled accounts receivable in a given period.
Billings reflects sales to new customers plus subscription renewals
and additional sales to existing customers. Only amounts invoiced
to a customer in a given period are included in billings. We
believe billings is a key metric to measure our periodic
performance. Given that most of our customers pay in annual
installments one year in advance, but we typically recognize a
majority of the related revenue ratably over time, we use billings
to measure and monitor our ability to provide our business with the
working capital generated by upfront payments from our
customers.
For a reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measure, please see
"Reconciliation of GAAP to Non-GAAP Financial Measures" below.
|
DOCUSIGN,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Subscription
|
$
|
258,122
|
|
|
$
|
187,572
|
|
|
$
|
918,463
|
|
|
$
|
663,657
|
|
|
Professional services
and other
|
16,773
|
|
|
12,160
|
|
|
55,508
|
|
|
37,312
|
|
|
Total
revenue
|
274,895
|
|
|
199,732
|
|
|
973,971
|
|
|
700,969
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Subscription
|
48,162
|
|
|
33,560
|
|
|
163,931
|
|
|
117,764
|
|
|
Professional services
and other
|
19,913
|
|
|
19,133
|
|
|
79,303
|
|
|
74,657
|
|
|
Total cost of
revenue
|
68,075
|
|
|
52,693
|
|
|
243,234
|
|
|
192,421
|
|
|
Gross
profit
|
206,820
|
|
|
147,039
|
|
|
730,737
|
|
|
508,548
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
161,326
|
|
|
127,691
|
|
|
591,379
|
|
|
539,606
|
|
|
Research and
development
|
52,094
|
|
|
42,921
|
|
|
185,552
|
|
|
185,968
|
|
|
General and
administrative
|
35,753
|
|
|
39,055
|
|
|
147,315
|
|
|
209,297
|
|
|
Total operating
expenses
|
249,173
|
|
|
209,667
|
|
|
924,246
|
|
|
934,871
|
|
|
Loss from
operations
|
(42,353)
|
|
|
(62,628)
|
|
|
(193,509)
|
|
|
(426,323)
|
|
|
Interest
expense
|
(7,461)
|
|
|
(7,101)
|
|
|
(29,254)
|
|
|
(10,844)
|
|
|
Interest income and
other income, net
|
3,658
|
|
|
4,794
|
|
|
19,207
|
|
|
8,959
|
|
|
Loss before
provision for (benefit from) income taxes
|
(46,156)
|
|
|
(64,935)
|
|
|
(203,556)
|
|
|
(428,208)
|
|
|
Provision for
(benefit from) income taxes
|
1,251
|
|
|
1,309
|
|
|
4,803
|
|
|
(1,750)
|
|
|
Net
loss
|
$
|
(47,407)
|
|
|
$
|
(66,244)
|
|
|
$
|
(208,359)
|
|
|
$
|
(426,458)
|
|
|
Net loss per share
attributable to common stockholders, basic and
diluted
|
$
|
(0.26)
|
|
|
$
|
(0.40)
|
|
|
$
|
(1.18)
|
|
|
$
|
(3.16)
|
|
|
Weighted-average
number of shares used in computing net loss per share attributable
to common stockholders, basic and diluted
|
180,859
|
|
|
167,269
|
|
|
176,704
|
|
|
135,163
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
|
3,951
|
|
|
$
|
2,241
|
|
|
$
|
12,882
|
|
|
$
|
16,182
|
|
|
Cost of
revenue—professional services and other
|
3,826
|
|
|
3,413
|
|
|
15,703
|
|
|
25,858
|
|
|
Sales and
marketing
|
26,170
|
|
|
20,505
|
|
|
94,863
|
|
|
172,115
|
|
|
Research and
development
|
12,252
|
|
|
9,562
|
|
|
43,211
|
|
|
74,108
|
|
|
General and
administrative
|
9,406
|
|
|
13,550
|
|
|
39,745
|
|
|
122,715
|
|
|
DOCUSIGN,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited)
|
|
|
(in thousands,
except share and per share data)
|
January 31,
2020
|
|
January 31,
2019
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
241,203
|
|
|
$
|
517,811
|
|
|
Investments—current
|
414,939
|
|
|
251,203
|
|
|
Restricted
cash
|
280
|
|
|
367
|
|
|
Accounts
receivable
|
237,841
|
|
|
174,548
|
|
|
Contract
assets—current
|
12,502
|
|
|
10,616
|
|
|
Prepaid expenses and
other current assets
|
37,125
|
|
|
29,976
|
|
|
Total current
assets
|
943,890
|
|
|
984,521
|
|
|
Investments—noncurrent
|
239,729
|
|
|
164,220
|
|
|
Property and
equipment, net
|
128,293
|
|
|
75,832
|
|
|
Operating lease
right-of-use assets
|
149,833
|
|
|
—
|
|
|
Goodwill
|
194,882
|
|
|
195,225
|
|
|
Intangible assets,
net
|
56,500
|
|
|
74,203
|
|
|
Deferred contract
acquisition costs—noncurrent
|
153,333
|
|
|
112,583
|
|
|
Other
assets—noncurrent
|
24,678
|
|
|
8,833
|
|
|
Total
assets
|
$
|
1,891,138
|
|
|
$
|
1,615,417
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
28,144
|
|
|
$
|
19,590
|
|
|
Accrued expenses and
other current liabilities
|
54,344
|
|
|
35,658
|
|
|
Accrued
compensation
|
83,189
|
|
|
77,553
|
|
|
Contract
liabilities—current
|
507,560
|
|
|
381,060
|
|
|
Operating lease
liabilities—current
|
20,728
|
|
|
—
|
|
|
Deferred
rent—current
|
—
|
|
|
2,452
|
|
|
Total current
liabilities
|
693,965
|
|
|
516,313
|
|
|
Convertible senior
notes, net
|
465,321
|
|
|
438,932
|
|
|
Contract
liabilities—noncurrent
|
11,478
|
|
|
7,712
|
|
|
Operating lease
liabilities—noncurrent
|
162,432
|
|
|
—
|
|
|
Deferred
rent—noncurrent
|
—
|
|
|
24,195
|
|
|
Deferred tax
liability—noncurrent
|
4,920
|
|
|
4,207
|
|
|
Other
liabilities—noncurrent
|
6,695
|
|
|
9,696
|
|
|
Total
liabilities
|
1,344,811
|
|
|
1,001,055
|
|
|
Stockholders'
equity
|
|
|
|
|
Common
stock
|
18
|
|
|
17
|
|
|
Additional paid-in
capital
|
1,685,167
|
|
|
1,545,088
|
|
|
Accumulated other
comprehensive loss
|
(1,673)
|
|
|
(1,965)
|
|
|
Accumulated
deficit
|
(1,137,185)
|
|
|
(928,778)
|
|
|
Total stockholders'
equity
|
546,327
|
|
|
614,362
|
|
|
Total liabilities
and stockholders' equity
|
$
|
1,891,138
|
|
|
$
|
1,615,417
|
|
|
DOCUSIGN,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(47,407)
|
|
|
$
|
(66,244)
|
|
|
$
|
(208,359)
|
|
|
$
|
(426,458)
|
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
13,266
|
|
|
12,003
|
|
|
50,182
|
|
|
38,027
|
|
|
Amortization of
deferred contract acquisition and fulfillment costs
|
20,387
|
|
|
12,223
|
|
|
69,747
|
|
|
42,112
|
|
|
Amortization of debt
discount and transaction costs
|
6,742
|
|
|
6,360
|
|
|
26,389
|
|
|
9,507
|
|
|
Non-cash operating
lease costs
|
5,592
|
|
|
—
|
|
|
19,435
|
|
|
—
|
|
|
Stock-based
compensation expense
|
55,605
|
|
|
49,271
|
|
|
206,404
|
|
|
410,978
|
|
|
Deferred income
taxes
|
1,245
|
|
|
2,346
|
|
|
1,287
|
|
|
(5,001)
|
|
|
Other
|
401
|
|
|
2,879
|
|
|
(1,741)
|
|
|
800
|
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(78,377)
|
|
|
(43,937)
|
|
|
(63,293)
|
|
|
(42,571)
|
|
|
Contract
assets
|
5,715
|
|
|
1,430
|
|
|
(1,508)
|
|
|
4,204
|
|
|
Prepaid expenses and
other current assets
|
(1,106)
|
|
|
(900)
|
|
|
(3,142)
|
|
|
(3,283)
|
|
|
Deferred contract
acquisition and fulfillment costs
|
(37,923)
|
|
|
(28,324)
|
|
|
(115,723)
|
|
|
(80,869)
|
|
|
Other
assets
|
612
|
|
|
656
|
|
|
1,538
|
|
|
2,658
|
|
|
Accounts
payable
|
1,543
|
|
|
(1,390)
|
|
|
3,849
|
|
|
(7,380)
|
|
|
Accrued expenses and
other liabilities
|
4,662
|
|
|
(1,122)
|
|
|
9,353
|
|
|
6,449
|
|
|
Accrued
compensation
|
12,329
|
|
|
23,868
|
|
|
5,636
|
|
|
26,039
|
|
|
Contract
liabilities
|
85,957
|
|
|
65,018
|
|
|
130,266
|
|
|
100,874
|
|
|
Operating lease
liabilities
|
(3,738)
|
|
|
—
|
|
|
(14,624)
|
|
|
—
|
|
|
Net cash provided by
operating activities
|
45,505
|
|
|
34,137
|
|
|
115,696
|
|
|
76,086
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of
marketable securities
|
(107,318)
|
|
|
(415,132)
|
|
|
(861,252)
|
|
|
(415,132)
|
|
|
Maturities of
marketable securities
|
166,599
|
|
|
—
|
|
|
627,309
|
|
|
—
|
|
|
Purchases of
strategic investments
|
—
|
|
|
—
|
|
|
(15,500)
|
|
|
—
|
|
|
Cash paid for
acquisition, net of acquired cash
|
—
|
|
|
—
|
|
|
—
|
|
|
(218,779)
|
|
|
Purchases of property
and equipment
|
(29,975)
|
|
|
(11,317)
|
|
|
(72,046)
|
|
|
(30,413)
|
|
|
Net cash provided by
(used in) investing activities
|
29,306
|
|
|
(426,449)
|
|
|
(321,489)
|
|
|
(664,324)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of convertible senior notes, net of initial purchasers'
discounts and transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
560,756
|
|
|
Purchase of capped
calls related to issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,563)
|
|
|
Proceeds from
issuance of common stock in initial public offering, net of
underwriting commissions
|
—
|
|
|
—
|
|
|
—
|
|
|
529,305
|
|
|
Payment of tax
withholding obligation on RSU settlement
|
(41,216)
|
|
|
(215,332)
|
|
|
(166,504)
|
|
|
(215,332)
|
|
|
Proceeds from
exercise of stock options
|
9,914
|
|
|
34,846
|
|
|
72,177
|
|
|
50,211
|
|
|
Proceeds from
employee stock purchase plan
|
—
|
|
|
—
|
|
|
23,872
|
|
|
—
|
|
|
Payment of deferred
offering costs
|
—
|
|
|
(319)
|
|
|
—
|
|
|
(4,011)
|
|
|
Other
financing
|
—
|
|
|
(250)
|
|
|
—
|
|
|
(250)
|
|
|
Net cash provided by
(used in) financing activities
|
(31,302)
|
|
|
(181,055)
|
|
|
(70,455)
|
|
|
853,116
|
|
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
(137)
|
|
|
(2,955)
|
|
|
(447)
|
|
|
(4,136)
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
43,372
|
|
|
(576,322)
|
|
|
(276,695)
|
|
|
260,742
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
198,111
|
|
|
1,094,500
|
|
|
518,178
|
|
|
257,436
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
241,483
|
|
|
$
|
518,178
|
|
|
$
|
241,483
|
|
|
$
|
518,178
|
|
|
DOCUSIGN,
INC.
|
|
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)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
GAAP gross
profit
|
$
|
206,820
|
|
|
$
|
147,039
|
|
|
$
|
730,737
|
|
|
$
|
508,548
|
|
|
Add: Stock-based
compensation
|
7,777
|
|
|
5,654
|
|
|
28,585
|
|
|
42,040
|
|
|
Add: Amortization of
acquisition-related intangibles
|
1,348
|
|
|
1,778
|
|
|
5,704
|
|
|
6,081
|
|
|
Add: Employer payroll
tax on employee stock transactions
|
668
|
|
|
1,949
|
|
|
2,577
|
|
|
1,949
|
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
Non-GAAP gross
profit
|
$
|
216,613
|
|
|
$
|
156,420
|
|
|
$
|
767,603
|
|
|
$
|
558,726
|
|
|
GAAP gross
margin
|
75
|
%
|
|
74
|
%
|
|
75
|
%
|
|
73
|
%
|
|
Non-GAAP
adjustments
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
7
|
%
|
|
Non-GAAP gross
margin
|
79
|
%
|
|
78
|
%
|
|
79
|
%
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$
|
209,960
|
|
|
$
|
154,012
|
|
|
$
|
754,532
|
|
|
$
|
545,893
|
|
|
Add: Stock-based
compensation
|
3,951
|
|
|
2,241
|
|
|
12,882
|
|
|
16,182
|
|
|
Add: Amortization of
acquisition-related intangibles
|
1,348
|
|
|
1,778
|
|
|
5,704
|
|
|
6,081
|
|
|
Add: Employer payroll
tax on employee stock transactions
|
285
|
|
|
830
|
|
|
1,054
|
|
|
830
|
|
|
Non-GAAP subscription
gross profit
|
$
|
215,544
|
|
|
$
|
158,861
|
|
|
$
|
774,172
|
|
|
$
|
568,986
|
|
|
GAAP subscription
gross margin
|
81
|
%
|
|
82
|
%
|
|
82
|
%
|
|
82
|
%
|
|
Non-GAAP
adjustments
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
|
4
|
%
|
|
Non-GAAP subscription
gross margin
|
84
|
%
|
|
85
|
%
|
|
84
|
%
|
|
86
|
%
|
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$
|
(3,140)
|
|
|
$
|
(6,973)
|
|
|
$
|
(23,795)
|
|
|
$
|
(37,345)
|
|
|
Add: Stock-based
compensation
|
3,826
|
|
|
3,413
|
|
|
15,703
|
|
|
25,858
|
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
Add: Employer payroll
tax on employee stock transactions
|
383
|
|
|
1,119
|
|
|
1,523
|
|
|
1,119
|
|
|
Non-GAAP professional
services and other gross profit (loss)
|
$
|
1,069
|
|
|
$
|
(2,441)
|
|
|
$
|
(6,569)
|
|
|
$
|
(10,260)
|
|
|
GAAP professional
services and other gross margin
|
(19)
|
%
|
|
(57)
|
%
|
|
(43)
|
%
|
|
(100)
|
%
|
|
Non-GAAP
adjustments
|
25
|
%
|
|
37
|
%
|
|
31
|
%
|
|
73
|
%
|
|
Non-GAAP professional
services and other gross margin
|
6
|
%
|
|
(20)
|
%
|
|
(12)
|
%
|
|
(27)
|
%
|
|
Reconciliation of
operating expenses:
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
GAAP sales and
marketing
|
$
|
161,326
|
|
|
$
|
127,691
|
|
|
$
|
591,379
|
|
|
$
|
539,606
|
|
|
Less: Stock-based
compensation
|
(26,170)
|
|
|
(20,505)
|
|
|
(94,863)
|
|
|
(172,115)
|
|
|
Less: Amortization of
acquisition-related intangibles
|
(2,911)
|
|
|
(3,234)
|
|
|
(12,013)
|
|
|
(7,021)
|
|
|
Less: Employer payroll
tax on employee stock transactions
|
(1,413)
|
|
|
(8,051)
|
|
|
(7,023)
|
|
|
(8,051)
|
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(68)
|
|
|
Non-GAAP sales and
marketing
|
$
|
130,832
|
|
|
$
|
95,901
|
|
|
$
|
477,480
|
|
|
$
|
352,351
|
|
|
GAAP sales and
marketing as a percentage of revenue
|
59
|
%
|
|
64
|
%
|
|
61
|
%
|
|
77
|
%
|
|
Non-GAAP sales and
marketing as a percentage of revenue
|
48
|
%
|
|
48
|
%
|
|
49
|
%
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
|
52,094
|
|
|
$
|
42,921
|
|
|
$
|
185,552
|
|
|
$
|
185,968
|
|
|
Less: Stock-based
compensation
|
(12,252)
|
|
|
(9,562)
|
|
|
(43,211)
|
|
|
(74,108)
|
|
|
Less: Employer payroll
tax on employee stock transactions
|
(636)
|
|
|
(2,246)
|
|
|
(3,524)
|
|
|
(2,246)
|
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(302)
|
|
|
Non-GAAP research and
development
|
$
|
39,206
|
|
|
$
|
31,113
|
|
|
$
|
138,817
|
|
|
$
|
109,312
|
|
|
GAAP research and
development as a percentage of revenue
|
19
|
%
|
|
21
|
%
|
|
19
|
%
|
|
27
|
%
|
|
Non-GAAP research and
development as a percentage of revenue
|
14
|
%
|
|
16
|
%
|
|
14
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
|
35,753
|
|
|
$
|
39,055
|
|
|
$
|
147,315
|
|
|
$
|
209,297
|
|
|
Less: Stock-based
compensation
|
(9,406)
|
|
|
(13,550)
|
|
|
(39,745)
|
|
|
(122,715)
|
|
|
Less: Employer payroll
tax on employee stock transactions
|
(540)
|
|
|
(3,411)
|
|
|
(3,596)
|
|
|
(3,411)
|
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,290)
|
|
|
Non-GAAP general and
administrative
|
$
|
25,807
|
|
|
$
|
22,094
|
|
|
$
|
103,974
|
|
|
$
|
81,881
|
|
|
GAAP general and
administrative as a percentage of revenue
|
12
|
%
|
|
20
|
%
|
|
15
|
%
|
|
30
|
%
|
|
Non-GAAP general and
administrative as a percentage of revenue
|
9
|
%
|
|
11
|
%
|
|
11
|
%
|
|
12
|
%
|
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
GAAP loss from
operations
|
$
|
(42,353)
|
|
|
$
|
(62,628)
|
|
|
$
|
(193,509)
|
|
|
$
|
(426,323)
|
|
|
Add: Stock-based
compensation
|
55,605
|
|
|
49,271
|
|
|
206,404
|
|
|
410,978
|
|
|
Add: Amortization of
acquisition-related intangibles
|
4,259
|
|
|
5,012
|
|
|
17,717
|
|
|
13,102
|
|
|
Add: Employer payroll
tax on employee stock transactions
|
3,257
|
|
|
15,657
|
|
|
16,720
|
|
|
15,657
|
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
1,768
|
|
|
Non-GAAP income from
operations
|
$
|
20,768
|
|
|
$
|
7,312
|
|
|
$
|
47,332
|
|
|
$
|
15,182
|
|
|
GAAP operating
margin
|
(15)
|
%
|
|
(31)
|
%
|
|
(20)
|
%
|
|
(61)
|
%
|
|
Non-GAAP
adjustments
|
23
|
%
|
|
35
|
%
|
|
25
|
%
|
|
63
|
%
|
|
Non-GAAP operating
margin
|
8
|
%
|
|
4
|
%
|
|
5
|
%
|
|
2
|
%
|
|
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)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
GAAP net
loss
|
$
|
(47,407)
|
|
|
$
|
(66,244)
|
|
|
$
|
(208,359)
|
|
|
$
|
(426,458)
|
|
|
Add: Stock-based
compensation
|
55,605
|
|
|
49,271
|
|
|
206,404
|
|
|
410,978
|
|
|
Add: Amortization of
acquisition-related intangibles
|
4,259
|
|
|
5,012
|
|
|
17,717
|
|
|
13,102
|
|
|
Add: Employer payroll
tax on employee stock transactions
|
3,257
|
|
|
15,657
|
|
|
16,720
|
|
|
15,657
|
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
1,839
|
|
|
Add: Amortization of
debt discount and issuance costs
|
6,742
|
|
|
6,360
|
|
|
26,389
|
|
|
9,507
|
|
|
Less: Tax effect of
the SpringCM acquisition(1)
|
—
|
|
|
289
|
|
|
—
|
|
|
(7,080)
|
|
|
Non-GAAP net
income
|
$
|
22,456
|
|
|
$
|
10,345
|
|
|
$
|
58,871
|
|
|
$
|
17,545
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
22,456
|
|
|
$
|
10,345
|
|
|
$
|
58,871
|
|
|
$
|
17,545
|
|
|
Less: Preferred stock
accretion
|
—
|
|
|
—
|
|
|
—
|
|
|
(353)
|
|
|
Less: Net income
allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,636)
|
|
|
Non-GAAP net income
attributable to common stockholders
|
$
|
22,456
|
|
|
$
|
10,345
|
|
|
$
|
58,871
|
|
|
$
|
14,556
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
180,859
|
|
|
167,269
|
|
|
176,704
|
|
|
135,163
|
|
|
Effect of dilutive
securities
|
12,869
|
|
|
20,390
|
|
|
14,094
|
|
|
23,513
|
|
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
193,728
|
|
|
187,659
|
|
|
190,798
|
|
|
158,676
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.26)
|
|
|
$
|
(0.40)
|
|
|
$
|
(1.18)
|
|
|
$
|
(3.16)
|
|
|
Non-GAAP net income
per share, basic
|
0.12
|
|
|
0.06
|
|
|
0.33
|
|
|
0.11
|
|
|
Non-GAAP net income
per share, diluted
|
0.12
|
|
|
0.06
|
|
|
0.31
|
|
|
0.09
|
|
|
|
|
(1)
|
Represents a tax
benefit related to the release of a portion of our deferred tax
asset valuation allowance resulting from the SpringCM
acquisition.
|
|
Computation of
free cash flow:
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net cash provided by
operating activities
|
$
|
45,505
|
|
|
$
|
34,137
|
|
|
$
|
115,696
|
|
|
$
|
76,086
|
|
|
Less: Purchases of
property and equipment
|
(29,975)
|
|
|
(11,317)
|
|
|
(72,046)
|
|
|
(30,413)
|
|
|
Non-GAAP free cash
flow
|
15,530
|
|
|
22,820
|
|
|
43,650
|
|
|
45,673
|
|
|
Net cash provided by
(used in) investing activities
|
29,306
|
|
|
(426,449)
|
|
|
(321,489)
|
|
|
(664,324)
|
|
|
Net cash provided by
(used in) financing activities
|
$
|
(31,302)
|
|
|
$
|
(181,055)
|
|
|
$
|
(70,455)
|
|
|
$
|
853,116
|
|
|
Computation of
billings:
|
|
|
|
Three Months Ended
January 31,
|
|
Year Ended January
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenue
|
$
|
274,895
|
|
|
$
|
199,732
|
|
|
$
|
973,971
|
|
|
$
|
700,969
|
|
|
Add: Contract
liabilities and refund liability, end of period
|
522,201
|
|
|
390,887
|
|
|
522,201
|
|
|
390,887
|
|
|
Less: Contract
liabilities and refund liability, beginning of period
|
(435,898)
|
|
|
(330,060)
|
|
|
(390,887)
|
|
|
(282,943)
|
|
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
20,805
|
|
|
15,229
|
|
|
13,436
|
|
|
16,899
|
|
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(15,082)
|
|
|
(13,436)
|
|
|
(15,082)
|
|
|
(13,436)
|
|
|
Less: Contract
liabilities and refund liability contributed by the acquisition of
SpringCM
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,002)
|
|
|
Non-GAAP
billings
|
$
|
366,921
|
|
|
$
|
262,352
|
|
|
$
|
1,103,639
|
|
|
$
|
801,374
|
|
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SOURCE DocuSign, Inc.