SAN FRANCISCO, Sept. 3,
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 fiscal quarter
ended July 31, 2020.
"In an accelerating digital world where business can be
conducted from anywhere, the need to agree electronically and
remotely has never been stronger, as shown in our 61%
year-over-year billings growth," said Dan
Springer, CEO of DocuSign. "We are just scratching the
surface of our Agreement Cloud opportunity and believe we are
increasingly becoming an essential cloud-software platform for
organizations of all sizes."
Second Quarter Financial Highlights
- Total revenue was $342.2
million, an increase of 45% year-over-year. Subscription
revenue was $323.6 million, an
increase of 47% year-over-year. Professional services and other
revenue was $18.6 million, an
increase of 25% year-over-year.
- Billings were $405.7
million, an increase of 61% year-over-year.
- GAAP gross margin was 74% in both comparative periods.
Non-GAAP gross margin was 78% in both comparative periods.
- GAAP net loss per basic and diluted share was
$0.35 on 185 million shares
outstanding compared to $0.39 on 175
million shares outstanding in the same period last year.
- Non-GAAP net income per diluted share was $0.17 on 203 million shares outstanding compared
to $0.01 on 189 million shares
outstanding in the same period last year.
- Net cash provided by operating activities was
$118.1 million compared to
$26.4 million in the same period last
year.
- Free cash flow was $99.8
million compared to $11.9
million in the same period last year.
- Cash, cash equivalents, restricted cash and
investments were $740.6 million
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
- DocuSign Agreement Cloud 2020 Product Release 2.
DocuSign introduced several new features and enhancements in the
latest release to support customers in their digital
transformations: DocuSign eSignature for Workplace from Facebook,
which allows access to DocuSign eSignature via a chatbot within
Facebook from Work; Workflow Templates for DocuSign CLM, which
allows business users to quickly configure common contract
processes such as approvals, signature, and routing; and
enhancements to DocuSign ID Verification and DocuSign Click.
- Liveoak Technologies Acquisition. On July 7, 2020, DocuSign announced its acquisition
of Liveoak Technologies, Inc. in an all-stock transaction. For
agreements that would normally require people to be physically
present together, Liveoak enables the transaction to be done
remotely via videoconferencing. The company's platform includes
several other technologies specific to remote agreements, such as
video identity verification, collaborative form-filling, an
integration with DocuSign eSignature, and a detailed audit trail.
DocuSign plans to leverage Liveoak's technology and expertise to
accelerate the launch of DocuSign Notary, a new product for remote
online notarization, where signers and the notary public are in
different places. The beta release of DocuSign Notary is currently
slated for November 2020.
- CTO appointment. On August 25,
2020, DocuSign announced Kamal
Hathi as its new chief technology officer (CTO). Prior to
joining DocuSign, Kamal was chief product and technology officer at
Trader Interactive, a leading provider of online marketplaces and
products serving the lifestyle vehicles and commercial equipment
sector. Before that he spent more than two decades at Microsoft,
most recently as GM for its SaaS analytics and business
intelligence solution, Power BI. As CTO, Kamal will oversee the
development and execution of DocuSign's technology roadmap,
including the expansion of the DocuSign Agreement Cloud.
Outlook
The company currently expects the following guidance:
▪
Quarter ending October 31, 2020 (in millions, except
percentages):
|
|
Total
revenue
|
$358
|
to
|
$362
|
Subscription
revenue
|
$343
|
to
|
$347
|
Billings
|
$380
|
to
|
$390
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
Non-GAAP sales and
marketing
|
46%
|
to
|
48%
|
Non-GAAP research and
development
|
14%
|
to
|
16%
|
Non-GAAP general and
administrative
|
9%
|
to
|
11%
|
Non-GAAP interest and
other income (expense)
|
$(1)
|
to
|
$1
|
Provision for income
taxes
|
$2
|
to
|
$3
|
Non-GAAP diluted
weighted-average shares outstanding
|
200
|
to
|
205
|
|
▪
Year ending January 31, 2021 (in millions, except
percentages):
|
|
Total
revenue
|
$1,384
|
to
|
$1,388
|
Subscription
revenue
|
$1,315
|
to
|
$1,319
|
Billings
|
$1,623
|
to
|
$1,643
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
Non-GAAP sales and
marketing
|
45%
|
to
|
47%
|
Non-GAAP research and
development
|
14%
|
to
|
16%
|
Non-GAAP general and
administrative
|
9%
|
to
|
11%
|
Non-GAAP interest and
other income
|
$4
|
to
|
$6
|
Provision for income
taxes
|
$7
|
to
|
$9
|
Non-GAAP diluted
weighted-average shares outstanding
|
200
|
to
|
205
|
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 September 3,
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) September 17, 2020 using the
passcode 13708111.
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, nearly 750,000 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
and integration of Seal Software and Liveoak Technologies. 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 include, among other things, risks related to the
impact of the COVID-19 pandemic on our business, financial
condition and results of operations as well as the businesses of
our customers and partners and the economy as a whole; 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, execute on,
integrate the operations of and realize the anticipated benefits of
potential 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 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; 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, 2020 filed on March
27, 2020, our quarterly report on Form 10-Q for the quarter
ended April 30, 2020 filed on
June 5, 2020, and other filings that
we make from time to time with the with the Securities and Exchange
Commission (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 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 from our convertible senior notes
issued in September 2018,
acquisition-related expenses, 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 that 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 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.
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months
Ended
July 31,
|
|
Six Months
Ended
July 31,
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
|
323,643
|
|
|
$
|
220,811
|
|
|
$
|
604,565
|
|
|
$
|
422,269
|
|
Professional services
and other
|
18,566
|
|
|
14,801
|
|
|
34,661
|
|
|
27,305
|
|
Total
revenue
|
342,209
|
|
|
235,612
|
|
|
639,226
|
|
|
449,574
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
64,730
|
|
|
39,472
|
|
|
116,740
|
|
|
72,591
|
|
Professional services
and other
|
25,885
|
|
|
21,704
|
|
|
47,907
|
|
|
40,604
|
|
Total cost of
revenue
|
90,615
|
|
|
61,176
|
|
|
164,647
|
|
|
113,195
|
|
Gross
profit
|
251,594
|
|
|
174,436
|
|
|
474,579
|
|
|
336,379
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
194,992
|
|
|
150,886
|
|
|
366,785
|
|
|
280,822
|
|
Research and
development
|
63,791
|
|
|
47,517
|
|
|
118,025
|
|
|
84,700
|
|
General and
administrative
|
51,446
|
|
|
40,755
|
|
|
90,257
|
|
|
78,016
|
|
Total operating
expenses
|
310,229
|
|
|
239,158
|
|
|
575,067
|
|
|
443,538
|
|
Loss from
operations
|
(58,635)
|
|
|
(64,722)
|
|
|
(100,488)
|
|
|
(107,159)
|
|
Interest
expense
|
(7,684)
|
|
|
(7,273)
|
|
|
(15,244)
|
|
|
(14,429)
|
|
Interest income and
other income, net
|
2,601
|
|
|
4,531
|
|
|
6,343
|
|
|
9,748
|
|
Loss before
provision for income taxes
|
(63,718)
|
|
|
(67,464)
|
|
|
(109,389)
|
|
|
(111,840)
|
|
Provision for income
taxes
|
842
|
|
|
1,168
|
|
|
2,975
|
|
|
2,514
|
|
Net
loss
|
$
|
(64,560)
|
|
|
$
|
(68,632)
|
|
|
$
|
(112,364)
|
|
|
$
|
(114,354)
|
|
Net loss per share
attributable to common stockholders, basic
and diluted
|
$
|
(0.35)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.66)
|
|
Weighted-average
number of shares used in computing net loss
per share attributable to common stockholders, basic and
diluted
|
184,862
|
|
|
175,389
|
|
|
183,930
|
|
|
173,773
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
|
5,014
|
|
|
$
|
3,115
|
|
|
$
|
8,878
|
|
|
$
|
5,397
|
|
Cost of
revenue—professional services and other
|
5,225
|
|
|
4,821
|
|
|
9,350
|
|
|
8,261
|
|
Sales and
marketing
|
32,305
|
|
|
25,942
|
|
|
56,970
|
|
|
44,044
|
|
Research and
development
|
14,781
|
|
|
11,963
|
|
|
26,666
|
|
|
19,280
|
|
General and
administrative
|
11,442
|
|
|
9,951
|
|
|
20,454
|
|
|
21,081
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(in
thousands)
|
July 31,
2020
|
|
January 31,
2020
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
404,262
|
|
|
$
|
241,203
|
|
Investments—current
|
269,777
|
|
|
414,939
|
|
Restricted
cash
|
280
|
|
|
280
|
|
Accounts
receivable
|
224,502
|
|
|
237,841
|
|
Contract
assets—current
|
17,044
|
|
|
12,502
|
|
Prepaid expenses and
other current assets
|
52,158
|
|
|
37,125
|
|
Total current
assets
|
968,023
|
|
|
943,890
|
|
Investments—noncurrent
|
66,265
|
|
|
239,729
|
|
Property and
equipment, net
|
150,646
|
|
|
128,293
|
|
Operating lease
right-of-use assets
|
168,313
|
|
|
149,833
|
|
Goodwill
|
349,254
|
|
|
194,882
|
|
Intangible assets,
net
|
135,825
|
|
|
56,500
|
|
Deferred contract
acquisition costs—noncurrent
|
198,325
|
|
|
153,333
|
|
Other
assets—noncurrent
|
16,659
|
|
|
24,678
|
|
Total
assets
|
$
|
2,053,310
|
|
|
$
|
1,891,138
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
33,053
|
|
|
$
|
28,144
|
|
Accrued expenses and
other current liabilities
|
54,916
|
|
|
54,344
|
|
Accrued
compensation
|
111,623
|
|
|
83,189
|
|
Contract
liabilities—current
|
624,031
|
|
|
507,560
|
|
Operating lease
liabilities—current
|
30,415
|
|
|
20,728
|
|
Total current
liabilities
|
854,038
|
|
|
693,965
|
|
Convertible senior
notes, net
|
479,105
|
|
|
465,321
|
|
Contract
liabilities—noncurrent
|
11,837
|
|
|
11,478
|
|
Operating lease
liabilities—noncurrent
|
177,862
|
|
|
162,432
|
|
Deferred tax
liability—noncurrent
|
8,740
|
|
|
4,920
|
|
Other
liabilities—noncurrent
|
19,837
|
|
|
6,695
|
|
Total
liabilities
|
1,551,419
|
|
|
1,344,811
|
|
Stockholders'
equity
|
|
|
|
Common
stock
|
19
|
|
|
18
|
|
Additional paid-in
capital
|
1,749,323
|
|
|
1,685,167
|
|
Accumulated other
comprehensive income (loss)
|
2,098
|
|
|
(1,673)
|
|
Accumulated
deficit
|
(1,249,549)
|
|
|
(1,137,185)
|
|
Total stockholders'
equity
|
501,891
|
|
|
546,327
|
|
Total liabilities
and stockholders' equity
|
$
|
2,053,310
|
|
|
$
|
1,891,138
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months
Ended
July 31,
|
|
Six Months
Ended
July 31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(64,560)
|
|
|
$
|
(68,632)
|
|
|
$
|
(112,364)
|
|
|
$
|
(114,354)
|
|
Adjustments to
reconcile net to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
17,937
|
|
|
12,290
|
|
|
31,976
|
|
|
24,261
|
|
Amortization of
deferred contract acquisition and fulfillment costs
|
23,834
|
|
|
16,889
|
|
|
45,194
|
|
|
31,149
|
|
Amortization of debt
discount and transaction costs
|
6,942
|
|
|
6,548
|
|
|
13,784
|
|
|
13,002
|
|
Non-cash operating
lease costs
|
6,795
|
|
|
4,735
|
|
|
13,119
|
|
|
8,863
|
|
Stock-based
compensation expense
|
68,767
|
|
|
55,792
|
|
|
122,318
|
|
|
98,063
|
|
Deferred income
taxes
|
(180)
|
|
|
(24)
|
|
|
(284)
|
|
|
28
|
|
Other
|
(997)
|
|
|
(1,260)
|
|
|
(493)
|
|
|
(2,371)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
7,915
|
|
|
(21,518)
|
|
|
25,154
|
|
|
35,896
|
|
Contract
assets
|
2,310
|
|
|
(2,204)
|
|
|
1,570
|
|
|
(4,905)
|
|
Prepaid expenses and
other current assets
|
4,272
|
|
|
3,950
|
|
|
(5,388)
|
|
|
(3,157)
|
|
Deferred contract
acquisition and fulfillment costs
|
(51,377)
|
|
|
(27,952)
|
|
|
(92,414)
|
|
|
(48,439)
|
|
Other
assets
|
(4,768)
|
|
|
418
|
|
|
(6,132)
|
|
|
959
|
|
Accounts
payable
|
8,829
|
|
|
1,306
|
|
|
6,275
|
|
|
1,588
|
|
Accrued expenses and
other liabilities
|
12,626
|
|
|
9,792
|
|
|
11,710
|
|
|
14,502
|
|
Accrued
compensation
|
24,401
|
|
|
22,296
|
|
|
22,865
|
|
|
2,427
|
|
Contract
liabilities
|
62,892
|
|
|
17,472
|
|
|
107,486
|
|
|
21,746
|
|
Operating lease
liabilities
|
(7,504)
|
|
|
(3,493)
|
|
|
(7,098)
|
|
|
(7,198)
|
|
Net cash provided by
operating activities
|
118,134
|
|
|
26,405
|
|
|
177,278
|
|
|
72,060
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash paid for
acquisition, net of acquired cash
|
(180,370)
|
|
|
—
|
|
|
(180,370)
|
|
|
—
|
|
Purchases of
marketable securities
|
(11,667)
|
|
|
(155,675)
|
|
|
(11,667)
|
|
|
(530,886)
|
|
Sales of marketable
securities
|
—
|
|
|
—
|
|
|
28,986
|
|
|
—
|
|
Maturities of
marketable securities
|
131,345
|
|
|
151,992
|
|
|
301,416
|
|
|
244,449
|
|
Purchases of
strategic investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,500)
|
|
Purchases of other
investments
|
(241)
|
|
|
—
|
|
|
(3,241)
|
|
|
—
|
|
Purchases of property
and equipment
|
(18,362)
|
|
|
(14,554)
|
|
|
(44,751)
|
|
|
(29,791)
|
|
Net cash provided by
(used in) investing activities
|
(79,295)
|
|
|
(18,237)
|
|
|
90,373
|
|
|
(331,728)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Payment of tax
withholding obligation on RSU settlement
|
(87,137)
|
|
|
(29,841)
|
|
|
(133,860)
|
|
|
(85,978)
|
|
Proceeds from
exercise of stock options
|
5,403
|
|
|
10,194
|
|
|
13,038
|
|
|
42,448
|
|
Proceeds from
employee stock purchase plan
|
—
|
|
|
—
|
|
|
13,590
|
|
|
10,563
|
|
Net cash used in
financing activities
|
(81,734)
|
|
|
(19,647)
|
|
|
(107,232)
|
|
|
(32,967)
|
|
Effect of foreign
exchange on cash, cash equivalents and restricted
cash
|
4,920
|
|
|
(741)
|
|
|
2,640
|
|
|
(1,120)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(37,975)
|
|
|
(12,220)
|
|
|
163,059
|
|
|
(293,755)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
442,517
|
|
|
236,643
|
|
|
241,483
|
|
|
518,178
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
404,542
|
|
|
$
|
224,423
|
|
|
$
|
404,542
|
|
|
$
|
224,423
|
|
DOCUSIGN,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
Reconciliation of
gross profit and gross margin:
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July
31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP gross
profit
|
$
|
251,594
|
|
|
$
|
174,436
|
|
|
$
|
474,579
|
|
|
$
|
336,379
|
|
Add: Stock-based
compensation
|
10,239
|
|
|
7,936
|
|
|
18,228
|
|
|
13,658
|
|
Add: Amortization of
acquisition-related intangibles
|
3,132
|
|
|
1,381
|
|
|
4,480
|
|
|
3,008
|
|
Add: Employer payroll
tax on employee stock transactions
|
1,738
|
|
|
541
|
|
|
2,774
|
|
|
1,193
|
|
Non-GAAP gross
profit
|
$
|
266,703
|
|
|
$
|
184,294
|
|
|
$
|
500,061
|
|
|
$
|
354,238
|
|
GAAP gross
margin
|
74
|
%
|
|
74
|
%
|
|
74
|
%
|
|
75
|
%
|
Non-GAAP
adjustments
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
Non-GAAP gross
margin
|
78
|
%
|
|
78
|
%
|
|
78
|
%
|
|
79
|
%
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$
|
258,913
|
|
|
$
|
181,339
|
|
|
$
|
487,825
|
|
|
$
|
349,678
|
|
Add: Stock-based
compensation
|
5,014
|
|
|
3,115
|
|
|
8,878
|
|
|
5,397
|
|
Add: Amortization of
acquisition-related intangibles
|
3,132
|
|
|
1,381
|
|
|
4,480
|
|
|
3,008
|
|
Add: Employer payroll
tax on employee stock transactions
|
926
|
|
|
211
|
|
|
1,461
|
|
|
432
|
|
Non-GAAP subscription
gross profit
|
$
|
267,985
|
|
|
$
|
186,046
|
|
|
$
|
502,644
|
|
|
$
|
358,515
|
|
GAAP subscription
gross margin
|
80
|
%
|
|
82
|
%
|
|
81
|
%
|
|
83
|
%
|
Non-GAAP
adjustments
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Non-GAAP subscription
gross margin
|
83
|
%
|
|
84
|
%
|
|
83
|
%
|
|
85
|
%
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$
|
(7,319)
|
|
|
$
|
(6,903)
|
|
|
$
|
(13,246)
|
|
|
$
|
(13,299)
|
|
Add: Stock-based
compensation
|
5,225
|
|
|
4,821
|
|
|
9,350
|
|
|
8,261
|
|
Add: Employer payroll
tax on employee stock transactions
|
812
|
|
|
330
|
|
|
1,313
|
|
|
761
|
|
Non-GAAP professional
services and other gross loss
|
$
|
(1,282)
|
|
|
$
|
(1,752)
|
|
|
$
|
(2,583)
|
|
|
$
|
(4,277)
|
|
GAAP professional
services and other gross margin
|
(39)
|
%
|
|
(47)
|
%
|
|
(38)
|
%
|
|
(49)
|
%
|
Non-GAAP
adjustments
|
32
|
%
|
|
35
|
%
|
|
31
|
%
|
|
33
|
%
|
Non-GAAP professional
services and other gross margin
|
(7)
|
%
|
|
(12)
|
%
|
|
(7)
|
%
|
|
(16)
|
%
|
Reconciliation of
operating expenses:
|
|
|
Three Months Ended
July
31,
|
|
Six Months Ended
July
31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP sales and
marketing
|
$
|
194,992
|
|
|
$
|
150,886
|
|
|
$
|
366,785
|
|
|
$
|
280,822
|
|
Less: Stock-based
compensation
|
(32,305)
|
|
|
(25,942)
|
|
|
(56,970)
|
|
|
(44,044)
|
|
Less: Amortization of
acquisition-related intangibles
|
(4,284)
|
|
|
(3,039)
|
|
|
(7,195)
|
|
|
(6,145)
|
|
Less:
Acquisition-related expenses
|
(186)
|
|
|
—
|
|
|
(186)
|
|
|
—
|
|
Less: Employer payroll
tax on employee stock transactions
|
(3,958)
|
|
|
(1,577)
|
|
|
(6,867)
|
|
|
(3,928)
|
|
Non-GAAP sales and
marketing
|
$
|
154,259
|
|
|
$
|
120,328
|
|
|
$
|
295,567
|
|
|
$
|
226,705
|
|
GAAP sales and
marketing as a percentage of revenue
|
57
|
%
|
|
64
|
%
|
|
57
|
%
|
|
62
|
%
|
Non-GAAP sales and
marketing as a percentage of revenue
|
45
|
%
|
|
51
|
%
|
|
46
|
%
|
|
50
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
|
63,791
|
|
|
$
|
47,517
|
|
|
$
|
118,025
|
|
|
$
|
84,700
|
|
Less: Stock-based
compensation
|
(14,781)
|
|
|
(11,963)
|
|
|
(26,666)
|
|
|
(19,280)
|
|
Less: Employer payroll
tax on employee stock transactions
|
(2,019)
|
|
|
(1,026)
|
|
|
(3,565)
|
|
|
(2,176)
|
|
Non-GAAP research and
development
|
$
|
46,991
|
|
|
$
|
34,528
|
|
|
$
|
87,794
|
|
|
$
|
63,244
|
|
GAAP research and
development as a percentage of revenue
|
19
|
%
|
|
20
|
%
|
|
18
|
%
|
|
19
|
%
|
Non-GAAP research and
development as a percentage of
revenue
|
14
|
%
|
|
15
|
%
|
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
|
51,446
|
|
|
$
|
40,755
|
|
|
$
|
90,257
|
|
|
$
|
78,016
|
|
Less: Stock-based
compensation
|
(11,442)
|
|
|
(9,951)
|
|
|
(20,454)
|
|
|
(21,081)
|
|
Less:
Acquisition-related expenses
|
(6,746)
|
|
|
—
|
|
|
(7,440)
|
|
|
—
|
|
Less: Employer payroll
tax on employee stock transactions
|
(1,544)
|
|
|
(720)
|
|
|
(2,601)
|
|
|
(2,322)
|
|
Non-GAAP general and
administrative
|
$
|
31,714
|
|
|
$
|
30,084
|
|
|
$
|
59,762
|
|
|
$
|
54,613
|
|
GAAP general and
administrative as a percentage of revenue
|
15
|
%
|
|
17
|
%
|
|
15
|
%
|
|
18
|
%
|
Non-GAAP general and
administrative as a percentage of
revenue
|
9
|
%
|
|
13
|
%
|
|
9
|
%
|
|
12
|
%
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months Ended
July
31,
|
|
Six Months Ended
July
31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP loss from
operations
|
$
|
(58,635)
|
|
|
$
|
(64,722)
|
|
|
$
|
(100,488)
|
|
|
$
|
(107,159)
|
|
Add: Stock-based
compensation
|
68,767
|
|
|
55,792
|
|
|
122,318
|
|
|
98,063
|
|
Add: Amortization of
acquisition-related intangibles
|
7,416
|
|
|
4,420
|
|
|
11,675
|
|
|
9,153
|
|
Add:
Acquisition-related expenses
|
6,932
|
|
|
—
|
|
|
7,626
|
|
|
—
|
|
Add: Employer payroll
tax on employee stock transactions
|
9,259
|
|
|
3,864
|
|
|
15,807
|
|
|
9,619
|
|
Non-GAAP income from
operations
|
$
|
33,739
|
|
|
$
|
(646)
|
|
|
$
|
56,938
|
|
|
$
|
9,676
|
|
GAAP operating
margin
|
(17)
|
%
|
|
(27)
|
%
|
|
(16)
|
%
|
|
(24)
|
%
|
Non-GAAP
adjustments
|
27
|
%
|
|
27
|
%
|
|
25
|
%
|
|
26
|
%
|
Non-GAAP operating
margin
|
10
|
%
|
|
—
|
%
|
|
9
|
%
|
|
2
|
%
|
Reconciliation of
net income (loss) and net income (loss) per share, basic and
diluted:
|
|
|
Three Months
Ended
July 31,
|
|
Six Months
Ended
July 31,
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net
loss
|
$
|
(64,560)
|
|
|
$
|
(68,632)
|
|
|
$
|
(112,364)
|
|
|
$
|
(114,354)
|
|
Add: Stock-based
compensation
|
68,767
|
|
|
55,792
|
|
|
122,318
|
|
|
98,063
|
|
Add: Amortization of
acquisition-related intangibles
|
7,416
|
|
|
4,420
|
|
|
11,675
|
|
|
9,153
|
|
Add:
Acquisition-related expenses
|
6,932
|
|
|
—
|
|
|
7,626
|
|
|
—
|
|
Add: Employer payroll
tax on employee stock transactions
|
9,259
|
|
|
3,864
|
|
|
15,807
|
|
|
9,619
|
|
Add: Amortization of
debt discount and issuance costs
|
6,942
|
|
|
6,548
|
|
|
13,784
|
|
|
13,002
|
|
Non-GAAP net
income
|
$
|
34,756
|
|
|
$
|
1,992
|
|
|
$
|
58,846
|
|
|
$
|
15,483
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
34,756
|
|
|
$
|
1,992
|
|
|
$
|
58,846
|
|
|
$
|
15,483
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
184,862
|
|
|
175,389
|
|
|
183,930
|
|
|
173,773
|
|
Effect of dilutive
securities
|
18,547
|
|
|
13,952
|
|
|
16,247
|
|
|
15,516
|
|
Non-GAAP
weighted-average common shares outstanding,
diluted
|
203,409
|
|
|
189,341
|
|
|
200,177
|
|
|
189,289
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.35)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.66)
|
|
Non-GAAP net income
per share, basic
|
0.19
|
|
|
0.01
|
|
|
0.32
|
|
|
0.09
|
|
Non-GAAP net income
per share, diluted
|
0.17
|
|
|
0.01
|
|
|
0.29
|
|
|
0.08
|
|
Computation of
free cash flow:
|
|
|
Three Months
Ended
July 31,
|
|
Six Months
Ended
July 31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
118,134
|
|
|
$
|
26,405
|
|
|
$
|
177,278
|
|
|
$
|
72,060
|
|
Less: Purchases of
property and equipment
|
(18,362)
|
|
|
(14,554)
|
|
|
(44,751)
|
|
|
(29,791)
|
|
Non-GAAP free cash
flow
|
$
|
99,772
|
|
|
$
|
11,851
|
|
|
$
|
132,527
|
|
|
$
|
42,269
|
|
Net cash provided by
(used in) investing activities
|
$
|
(79,295)
|
|
|
$
|
(18,237)
|
|
|
$
|
90,373
|
|
|
$
|
(331,728)
|
|
Net cash used in
financing activities
|
$
|
(81,734)
|
|
|
$
|
(19,647)
|
|
|
$
|
(107,232)
|
|
|
$
|
(32,967)
|
|
Computation of
billings:
|
|
|
Three Months
Ended
July 31,
|
|
Six Months
Ended
July 31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
342,209
|
|
|
$
|
235,612
|
|
|
$
|
639,226
|
|
|
$
|
449,574
|
|
Add: Contract
liabilities and refund liability, end of period
|
638,790
|
|
|
412,953
|
|
|
638,790
|
|
|
412,953
|
|
Less: Contract
liabilities and refund liability, beginning of
period
|
(568,544)
|
|
|
(395,254)
|
|
|
(522,201)
|
|
|
(390,887)
|
|
Add: Contract assets
and unbilled accounts receivable,
beginning of period
|
16,390
|
|
|
16,810
|
|
|
15,082
|
|
|
13,436
|
|
Less: Contract assets
and unbilled accounts receivable, end of
period
|
(20,395)
|
|
|
(17,757)
|
|
|
(20,395)
|
|
|
(17,757)
|
|
Add: Contract assets
and unbilled accounts receivable by
acquisitions
|
6,589
|
|
|
—
|
|
|
6,589
|
|
|
—
|
|
Less: Contract
liabilities and refund liability contributed by
acquisitions
|
(9,344)
|
|
|
—
|
|
|
(9,344)
|
|
|
—
|
|
Non-GAAP
billings
|
$
|
405,695
|
|
|
$
|
252,364
|
|
|
$
|
747,747
|
|
|
$
|
467,319
|
|
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SOURCE DocuSign, Inc.