SAN FRANCISCO, March 10, 2022 /PRNewswire/ -- DocuSign, Inc.
(NASDAQ: DOCU), which offers the world's #1 e-signature solution as
part of the DocuSign Agreement Cloud, today announced results for
its fourth quarter and fiscal year ended January 31, 2022.
"In fiscal 2022, we grew revenues by 45% and billings by
37% year-over year, while generating record operating and cash
flow margins. While the year unfolded differently than expected, we
are proud of the ongoing performance and resilience of our team as
we scaled to become a multi-billion dollar company. Together, we
helped another 280,000 new customers begin digitizing how they
agree as we surpassed 1.17 million total customers overall, " said
Dan Springer, CEO of DocuSign. " As
we head into Fiscal 2023, digital transformation and the need to
agree from anywhere remains a high priority for organizations
across the globe. As people begin to return to the office, they are
not returning to paper. eSignature and the broader Agreement Cloud
will only continue to gain prominence in the evolving Anywhere
Economy."
Fourth Quarter Financial Highlights
- Total revenue was $580.8
million, an increase of 35% year-over-year. Subscription
revenue was $564.0 million, an
increase of 37% year-over-year. Professional services and other
revenue was $16.8 million, a decrease
of 19% year-over-year.
- Billings were $670.1
million, an increase of 25% year-over-year.
- GAAP gross margin was 77%, compared to 76% in the same
period last year. Non-GAAP gross margin was 81% compared to 80% in
the same period last year.
- GAAP net loss per basic and diluted share was
$0.15 on 199 million shares
outstanding compared to $0.38 on 189
million shares outstanding in the same period last year.
- Non-GAAP net income per diluted share was $0.48 on 207 million shares outstanding compared
to $0.37 on 209 million shares
outstanding in the same period last year.
- Net cash provided by operating activities was
$87.8 million compared to
$62.2 million in the same period last
year.
- Free cash flow was $70.3
million compared to $44.0
million in the same period last year.
- Cash, cash equivalents, restricted cash and investments
were $898.4 million at the end of the
quarter.
Fiscal 2022 Financial Highlights
- Total revenue was $2.1
billion, an increase of 45% year-over-year. Subscription
revenue was $2.0 billion, an increase
of 47% year-over-year. Professional services and other revenue was
$69.9 million, a decrease of 2%
year-over-year.
- Billings were $2.4
billion, an increase of 37% year-over-year.
- GAAP gross margin was 78%, compared to 75% in fiscal
2021. Non-GAAP gross margin was 82%, compared to 79% in fiscal
2021.
- GAAP net loss per basic and diluted share was
$0.36 on 197 million shares
outstanding compared to $1.31 on 186
million shares outstanding in fiscal 2021.
- Non-GAAP net income per diluted share was $1.98 on 208 million shares outstanding compared
to $0.90 on 204 million shares
outstanding in fiscal 2021.
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."
Stock Repurchase Authorization
- DocuSign's Board of Directors has authorized a stock repurchase
program of up to $200 million of
DocuSign's outstanding common stock. The program has no minimum
purchase commitment and no mandated end date. The repurchase is
expected to be executed, subject to general business and market
conditions and other investment opportunities, through open market
purchases, and other transactions in accordance with applicable
securities laws. The timing and the amount of any repurchased
common stock will be determined by DocuSign's management based on
its evaluation of market conditions and other factors. The
repurchase program does not obligate DocuSign to acquire any
particular amount of common stock and the repurchase program may be
suspended or discontinued at any time at DocuSign's discretion
without prior notice.
Operational and Other Financial Highlights
- Partnership with Zoom: On February 15, 2022, DocuSign and Zoom
Communications announced a partnership to make it even easier to
complete agreements from anywhere. DocuSign eSignature for Zoom
enables organizations to reimagine agreement processes with
virtual, face-to-face signing experiences that accelerate time to
agreement while building trust and loyalty. Through this
partnership, signers can find, review and complete agreements live
within Zoom. DocuSign eSignature for Zoom can also safeguard
agreements by automatically verifying a signer's government-issued
photo ID or eID in real-time with ID Verification.
- Chief Diversity & Engagement Officer appointment. On
March 7, 2022, DocuSign announced
Iesha Berry as its new Chief
Diversity & Engagement Officer. Prior to joining DocuSign,
Iesha served as the first Chief Inclusion, Diversity and Equity
Officer for Slalom where she led the company's diversity and
inclusion programs, as well as its environmental, social
responsibility, and sustainability efforts. With more than 20
years' experience with Diversity, Equity & Inclusion roles at
companies including Bank of America, Pfizer, Microsoft and
Prudential Financial, Iesha will focus on accelerating DocuSign's
Diversity, Inclusion and Belonging strategy while building off the
existing accomplishments DocuSign has achieved.
- Updated SMS and Phone Authentication: DocuSign has
updated its SMS authentication to provide signers the option of
receiving a one-time access passcode via either calls or text
messages. This helps signers with a landline phone number to
successfully complete authentication.
Outlook
The company currently expects the following guidance:
▪
|
Quarter ending
April 30, 2022 (in millions, except percentages):
|
|
Total
revenue
|
$579
|
to
|
$583
|
|
Subscription
revenue
|
$562
|
to
|
$566
|
|
Billings
|
$573
|
to
|
$583
|
|
Non-GAAP gross
margin
|
79%
|
to
|
81%
|
|
Non-GAAP operating
margin
|
16%
|
to
|
18%
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
205
|
to
|
210
|
|
|
▪
|
Fiscal year ending
January 31, 2023 (in millions, except percentages):
|
|
Total
revenue
|
$2,470
|
to
|
$2,482
|
|
Subscription
revenue
|
$2,394
|
to
|
$2,406
|
|
Billings
|
$2,706
|
to
|
$2,726
|
|
Non-GAAP gross
margin
|
79%
|
to
|
81%
|
|
Non-GAAP operating
margin
|
16%
|
to
|
18%
|
|
Provision for income
taxes
|
$4
|
to
|
$8
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
205
|
to
|
210
|
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 10, 2022
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 24, 2022, using the passcode 13727117.
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, over a million customers and
more than a billion users in over 180 countries use the DocuSign
Agreement Cloud to accelerate the process of doing business and
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 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, that are based on our management's beliefs and assumptions
and on information currently available to management. and which
statements involve substantial risk and uncertainties.
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 DocuSign's intention to implement
a program to repurchase up to $200
million of DocuSign's common stock, including the expected
timing, duration, volume and nature of such stock repurchase
program. 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 expectations regarding the impact of the COVID-19
pandemic, including the easing of related regulations and measures
as the pandemic and its related effects begin to abate or have
abated, on our business, results of operations, financial
condition, and future profitability and growth; our expectations
regarding the impact of the evolving COVID-19 pandemic on the
businesses of our customers, partners and suppliers, and the
economy, as well as the macro- and micro-effects of the pandemic,
including the pace of the digital transformation of business and
differing levels of demand for our products as our customers'
priorities, resources, financial conditions and economic outlook
change; our ability to estimate the size of our total addressable
market, and the development of the market for our products, which
is new and evolving; 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
relationships with developers; our ability to expand our direct
sales force, customer success team and strategic partnerships
around the world; the impact of any data breaches, cyberattacks or
other malicious activity on our technology systems; our ability to
identify targets for and execute potential acquisitions; our
ability to successfully integrate the operations of businesses we
may acquire, and to 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; our ability to estimate the size and potential
growth of our target market; uncertainties regarding the impact of
general economic and market conditions, including as a result of
regional and global conflicts or related government sanctions; 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 quarterly report on Form 10-Q for the
quarter ended October 31, 2021 filed
on December 6, 2021 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 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,
loss on extinguishment of debt, fair value adjustments to strategic
investments, impairment of operating lease right-of-use assets, tax
impact related to an intercompany IP transfer 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 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.
DOCUSIGN, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in thousands,
except per share data)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
564,006
|
|
$
410,215
|
|
$
2,037,272
|
|
$
1,381,397
|
Professional services
and other
|
16,822
|
|
20,683
|
|
69,941
|
|
71,650
|
Total
revenue
|
580,828
|
|
430,898
|
|
2,107,213
|
|
1,453,047
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
96,556
|
|
73,347
|
|
343,661
|
|
259,992
|
Professional services
and other
|
34,898
|
|
28,233
|
|
122,790
|
|
104,066
|
Total cost of
revenue
|
131,454
|
|
101,580
|
|
466,451
|
|
364,058
|
Gross
profit
|
449,374
|
|
329,318
|
|
1,640,762
|
|
1,088,989
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
299,417
|
|
221,896
|
|
1,076,527
|
|
798,625
|
Research and
development
|
110,692
|
|
80,135
|
|
393,362
|
|
271,522
|
General and
administrative
|
64,443
|
|
52,184
|
|
232,757
|
|
192,697
|
Total operating
expenses
|
474,552
|
|
354,215
|
|
1,702,646
|
|
1,262,844
|
Loss from
operations
|
(25,178)
|
|
(24,897)
|
|
(61,884)
|
|
(173,855)
|
Interest
expense
|
(1,617)
|
|
(7,786)
|
|
(6,443)
|
|
(30,799)
|
Loss on
extinguishment of debt
|
—
|
|
(33,752)
|
|
—
|
|
(33,752)
|
Interest income and
other income (expense), net
|
(2,621)
|
|
2,882
|
|
1,413
|
|
8,914
|
Loss before
provision for income taxes
|
(29,416)
|
|
(63,553)
|
|
(66,914)
|
|
(229,492)
|
Provision for income
taxes
|
1,029
|
|
8,859
|
|
3,062
|
|
13,775
|
Net
loss
|
$
(30,445)
|
|
$
(72,412)
|
|
$
(69,976)
|
|
$
(243,267)
|
Net loss per share
attributable to common stockholders, basic and diluted
|
$
(0.15)
|
|
$
(0.38)
|
|
$
(0.36)
|
|
$
(1.31)
|
Weighted-average
number of shares used in computing net loss per share attributable
to common stockholders, basic and diluted
|
198,687
|
|
188,717
|
|
196,675
|
|
185,760
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
9,500
|
|
$
6,138
|
|
$
31,152
|
|
$
20,793
|
Cost of
revenue—professional services and other
|
8,096
|
|
6,510
|
|
27,347
|
|
21,865
|
Sales and
marketing
|
52,040
|
|
37,190
|
|
186,759
|
|
131,041
|
Research and
development
|
31,712
|
|
20,328
|
|
108,523
|
|
65,890
|
General and
administrative
|
16,659
|
|
13,473
|
|
54,761
|
|
47,288
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(in
thousands)
|
January 31,
2022
|
|
January 31,
2021
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
509,059
|
|
$
566,055
|
Investments—current
|
293,763
|
|
207,450
|
Accounts receivable,
net
|
440,950
|
|
323,570
|
Contract
assets—current
|
12,588
|
|
16,883
|
Prepaid expenses and
other current assets
|
63,236
|
|
48,390
|
Total current
assets
|
1,319,596
|
|
1,162,348
|
Investments—noncurrent
|
94,938
|
|
92,717
|
Property and
equipment, net
|
184,664
|
|
165,039
|
Operating lease
right-of-use assets
|
126,021
|
|
159,352
|
Goodwill
|
355,058
|
|
350,151
|
Intangible assets,
net
|
98,816
|
|
121,828
|
Deferred contract
acquisition costs—noncurrent
|
311,835
|
|
260,130
|
Other
assets—noncurrent
|
50,337
|
|
24,942
|
Total
assets
|
$
2,541,265
|
|
$
2,336,507
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
52,804
|
|
$
37,367
|
Accrued expenses and
other current liabilities
|
91,377
|
|
66,566
|
Accrued
compensation
|
160,163
|
|
156,158
|
Convertible senior
notes—current
|
—
|
|
20,469
|
Contract
liabilities—current
|
1,029,891
|
|
779,642
|
Operating lease
liabilities—current
|
37,404
|
|
32,971
|
Total current
liabilities
|
1,371,639
|
|
1,093,173
|
Convertible senior
notes, net—noncurrent
|
718,487
|
|
693,219
|
Contract
liabilities—noncurrent
|
16,725
|
|
16,492
|
Operating lease
liabilities—noncurrent
|
126,340
|
|
165,704
|
Deferred tax
liability—noncurrent
|
9,316
|
|
6,464
|
Other
liabilities—noncurrent
|
23,255
|
|
32,328
|
Total
liabilities
|
2,265,762
|
|
2,007,380
|
Convertible senior
notes
|
—
|
|
3,390
|
Stockholders'
equity
|
|
|
|
Common
stock
|
20
|
|
19
|
Treasury
stock
|
(1,532)
|
|
(1,048)
|
Additional paid-in
capital
|
1,720,013
|
|
1,702,254
|
Accumulated other
comprehensive income (loss)
|
(4,809)
|
|
4,964
|
Accumulated
deficit
|
(1,438,189)
|
|
(1,380,452)
|
Total stockholders'
equity
|
275,503
|
|
325,737
|
Total liabilities
and equity
|
$
2,541,265
|
|
$
2,336,507
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
(30,445)
|
|
$
(72,412)
|
|
$
(69,976)
|
|
$
(243,267)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
20,750
|
|
19,635
|
|
81,913
|
|
71,090
|
Amortization of
deferred contract acquisition and fulfillment costs
|
43,683
|
|
28,597
|
|
144,442
|
|
99,384
|
Amortization of debt
discount and transaction costs
|
1,250
|
|
7,173
|
|
5,098
|
|
28,001
|
Loss on extinguishment
of debt
|
—
|
|
33,752
|
|
—
|
|
33,752
|
Operating cash flow
related to repayments of convertible senior notes
|
—
|
|
(75,165)
|
|
—
|
|
(75,165)
|
Non-cash operating
lease costs
|
6,643
|
|
6,646
|
|
26,819
|
|
26,728
|
Stock-based
compensation expense
|
118,006
|
|
83,639
|
|
408,542
|
|
286,877
|
Deferred income
taxes
|
3,729
|
|
(1,360)
|
|
1,369
|
|
(2,410)
|
Other
|
4,274
|
|
(1,416)
|
|
9,871
|
|
(210)
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
(135,349)
|
|
(62,484)
|
|
(117,380)
|
|
(73,913)
|
Contract
assets
|
2,471
|
|
5,802
|
|
4,893
|
|
1,912
|
Prepaid expenses and
other current assets
|
5,816
|
|
680
|
|
(7,074)
|
|
(1,155)
|
Deferred contract
acquisition and fulfillment costs
|
(59,447)
|
|
(63,871)
|
|
(207,393)
|
|
(208,510)
|
Other
assets
|
(2,677)
|
|
457
|
|
(16,389)
|
|
(6,006)
|
Accounts
payable
|
5,445
|
|
8,473
|
|
12,148
|
|
12,128
|
Accrued expenses and
other liabilities
|
(1,058)
|
|
15,203
|
|
10,828
|
|
37,155
|
Accrued
compensation
|
23,909
|
|
41,033
|
|
1,128
|
|
64,586
|
Contract
liabilities
|
89,435
|
|
95,230
|
|
250,482
|
|
267,750
|
Operating lease
liabilities
|
(8,642)
|
|
(7,379)
|
|
(32,854)
|
|
(21,773)
|
Net cash provided by
operating activities
|
87,793
|
|
62,233
|
|
506,467
|
|
296,954
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash paid for
acquisition, net of acquired cash
|
—
|
|
—
|
|
(6,388)
|
|
(180,370)
|
Purchases of
marketable securities
|
(81,366)
|
|
(84,340)
|
|
(384,128)
|
|
(164,989)
|
Sales of marketable
securities
|
4,499
|
|
—
|
|
7,569
|
|
28,986
|
Maturities of
marketable securities
|
90,113
|
|
83,756
|
|
283,184
|
|
488,538
|
Purchases of
strategic and other investments
|
(1,000)
|
|
—
|
|
(1,750)
|
|
(8,541)
|
Purchases of property
and equipment
|
(17,470)
|
|
(18,251)
|
|
(61,396)
|
|
(82,395)
|
Net cash (used in)
provided by investing activities
|
(5,224)
|
|
(18,835)
|
|
(162,909)
|
|
81,229
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of convertible senior notes, net of initial purchasers'
discounts and transaction costs
|
—
|
|
677,370
|
|
—
|
|
677,370
|
Purchase of capped
calls related to issuance of convertible senior notes
|
—
|
|
(31,395)
|
|
—
|
|
(31,395)
|
Repayments of
convertible senior notes
|
(13,071)
|
|
(384,199)
|
|
(77,906)
|
|
(384,199)
|
Payment of revolving
credit facility costs
|
—
|
|
(2,453)
|
|
—
|
|
(2,453)
|
Payment of tax
withholding obligation on RSU settlement and ESPP
purchase
|
(63,412)
|
|
(125,186)
|
|
(386,521)
|
|
(372,463)
|
Proceeds from
exercise of stock options
|
2,553
|
|
9,322
|
|
23,729
|
|
24,305
|
Proceeds from
employee stock purchase plan
|
—
|
|
—
|
|
46,077
|
|
29,859
|
Net cash (used in)
provided by financing activities
|
(73,930)
|
|
143,459
|
|
(394,621)
|
|
(58,976)
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
(3,122)
|
|
4,214
|
|
(5,594)
|
|
5,646
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
5,517
|
|
191,071
|
|
(56,657)
|
|
324,853
|
Cash, cash
equivalents and restricted cash at beginning of period
(1)
|
504,162
|
|
375,265
|
|
566,336
|
|
241,483
|
Cash, cash
equivalents and restricted cash at end of period
(1)
|
$
509,679
|
|
$
566,336
|
|
$
509,679
|
|
$
566,336
|
|
|
(1)
|
$0.6 million of
restricted cash was included in both Prepaid expenses and other
current assets and Other assets—noncurrent at January 31,
2022. $0.3 million of restricted cash was included in Prepaid
expenses and other current assets at October 31, 2021 and in Other
assets—noncurrent at January 31, 2021 and October 31,
2020.
|
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)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP gross
profit
|
$ 449,374
|
|
$ 329,318
|
|
$
1,640,762
|
|
$
1,088,989
|
Add: Stock-based
compensation
|
17,596
|
|
12,648
|
|
58,499
|
|
42,658
|
Add: Amortization of
acquisition-related intangibles
|
2,403
|
|
3,196
|
|
11,670
|
|
11,052
|
Add: Employer payroll
tax on employee stock transactions
|
829
|
|
1,454
|
|
7,524
|
|
5,904
|
Non-GAAP gross
profit
|
$ 470,202
|
|
$ 346,616
|
|
$
1,718,455
|
|
$
1,148,603
|
GAAP gross
margin
|
77%
|
|
76%
|
|
78%
|
|
75%
|
Non-GAAP
adjustments
|
4%
|
|
4%
|
|
4%
|
|
4%
|
Non-GAAP gross
margin
|
81%
|
|
80%
|
|
82%
|
|
79%
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$ 467,450
|
|
$ 336,868
|
|
$
1,693,611
|
|
$
1,121,405
|
Add: Stock-based
compensation
|
9,500
|
|
6,138
|
|
31,152
|
|
20,793
|
Add: Amortization of
acquisition-related intangibles
|
2,403
|
|
3,196
|
|
11,670
|
|
11,052
|
Add: Employer payroll
tax on employee stock transactions
|
417
|
|
679
|
|
3,703
|
|
2,862
|
Non-GAAP subscription
gross profit
|
$ 479,770
|
|
$ 346,881
|
|
$
1,740,136
|
|
$
1,156,112
|
GAAP subscription
gross margin
|
83%
|
|
82%
|
|
83%
|
|
81%
|
Non-GAAP
adjustments
|
2%
|
|
3%
|
|
2%
|
|
3%
|
Non-GAAP subscription
gross margin
|
85%
|
|
85%
|
|
85%
|
|
84%
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$ (18,076)
|
|
$
(7,550)
|
|
$ (52,849)
|
|
$ (32,416)
|
Add: Stock-based
compensation
|
8,096
|
|
6,510
|
|
27,347
|
|
21,865
|
Add: Employer payroll
tax on employee stock transactions
|
412
|
|
775
|
|
3,821
|
|
3,042
|
Non-GAAP professional
services and other gross loss
|
$
(9,568)
|
|
$
(265)
|
|
$ (21,681)
|
|
$
(7,509)
|
GAAP professional
services and other gross margin
|
(107)%
|
|
(37)%
|
|
(76)%
|
|
(45)%
|
Non-GAAP
adjustments
|
50%
|
|
36%
|
|
45%
|
|
35%
|
Non-GAAP professional
services and other gross margin
|
(57)%
|
|
(1)%
|
|
(31)%
|
|
(10)%
|
|
Reconciliation of
operating expenses:
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP sales and
marketing
|
$ 299,417
|
|
$ 221,896
|
|
$
1,076,527
|
|
$ 798,625
|
Less: Stock-based
compensation
|
(52,040)
|
|
(37,190)
|
|
(186,759)
|
|
(131,041)
|
Less: Amortization of
acquisition-related intangibles
|
(3,205)
|
|
(3,390)
|
|
(13,100)
|
|
(14,566)
|
Less: Employer payroll
tax on employee stock transactions
|
(1,960)
|
|
(3,198)
|
|
(19,628)
|
|
(14,190)
|
Less:
Acquisition-related expenses
|
—
|
|
—
|
|
—
|
|
(186)
|
Non-GAAP sales and
marketing
|
$ 242,212
|
|
$ 178,118
|
|
$ 857,040
|
|
$ 638,642
|
GAAP sales and
marketing as a percentage of revenue
|
52%
|
|
51%
|
|
51%
|
|
55%
|
Non-GAAP sales and
marketing as a percentage of revenue
|
42%
|
|
41%
|
|
41%
|
|
44%
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$ 110,692
|
|
$
80,135
|
|
$ 393,362
|
|
$ 271,522
|
Less: Stock-based
compensation
|
(31,712)
|
|
(20,328)
|
|
(108,523)
|
|
(65,890)
|
Less: Employer payroll
tax on employee stock transactions
|
(1,097)
|
|
(2,012)
|
|
(10,341)
|
|
(7,329)
|
Non-GAAP research and
development
|
$
77,883
|
|
$
57,795
|
|
$ 274,498
|
|
$ 198,303
|
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%
|
|
14%
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
64,443
|
|
$
52,184
|
|
$ 232,757
|
|
$ 192,697
|
Less: Stock-based
compensation
|
(16,659)
|
|
(13,473)
|
|
(54,761)
|
|
(47,288)
|
Less: Employer payroll
tax on employee stock transactions
|
(334)
|
|
(2,612)
|
|
(4,699)
|
|
(6,619)
|
Less:
Acquisition-related expenses
|
—
|
|
—
|
|
(387)
|
|
(7,776)
|
Less: Impairment of
operating lease right-of-use assets
|
(1,207)
|
|
—
|
|
(5,099)
|
|
—
|
Non-GAAP general and
administrative
|
$
46,243
|
|
$
36,099
|
|
$ 167,811
|
|
$ 131,014
|
GAAP general and
administrative as a percentage of revenue
|
10%
|
|
12%
|
|
11%
|
|
13%
|
Non-GAAP general and
administrative as a percentage of revenue
|
8%
|
|
9%
|
|
8%
|
|
9%
|
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP loss from
operations
|
$ (25,178)
|
|
$ (24,897)
|
|
$ (61,884)
|
|
$
(173,855)
|
Add: Stock-based
compensation
|
118,007
|
|
83,639
|
|
408,542
|
|
286,877
|
Add: Amortization of
acquisition-related intangibles
|
5,608
|
|
6,586
|
|
24,770
|
|
25,618
|
Add: Employer payroll
tax on employee stock transactions
|
4,220
|
|
9,276
|
|
42,192
|
|
34,042
|
Add:
Acquisition-related expenses
|
—
|
|
—
|
|
387
|
|
7,962
|
Add: Impairment of
operating lease right-of-use assets
|
1,207
|
|
—
|
|
5,099
|
|
—
|
Non-GAAP income from
operations
|
$ 103,864
|
|
$
74,604
|
|
$ 419,106
|
|
$ 180,644
|
GAAP operating
margin
|
(4)%
|
|
(6)%
|
|
(3)%
|
|
(12)%
|
Non-GAAP
adjustments
|
22%
|
|
23%
|
|
23%
|
|
24%
|
Non-GAAP operating
margin
|
18%
|
|
17%
|
|
20%
|
|
12%
|
|
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)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net
loss
|
$
(30,445)
|
|
$
(72,412)
|
|
$
(69,976)
|
|
$
(243,267)
|
Add: Stock-based
compensation
|
118,007
|
|
83,639
|
|
408,542
|
|
286,877
|
Add: Amortization of
acquisition-related intangibles
|
5,608
|
|
6,586
|
|
24,770
|
|
25,618
|
Add: Employer payroll
tax on employee stock transactions
|
4,220
|
|
9,276
|
|
42,192
|
|
34,042
|
Add:
Acquisition-related expenses
|
—
|
|
—
|
|
387
|
|
7,962
|
Add: Amortization of
debt discount and issuance costs
|
1,250
|
|
7,173
|
|
5,098
|
|
28,001
|
Add: Loss on
extinguishment of debt
|
—
|
|
33,752
|
|
—
|
|
33,752
|
Add: Tax expense
related to intercompany IP transfer(1)
|
—
|
|
9,294
|
|
—
|
|
9,294
|
Less: Fair value
adjustments to strategic investments
|
—
|
|
—
|
|
(5,270)
|
|
—
|
Add: Impairment of
operating lease right-of-use assets
|
1,207
|
|
—
|
|
5,099
|
|
—
|
Non-GAAP net
income
|
$
99,847
|
|
$
77,308
|
|
$
410,842
|
|
$
182,279
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
99,847
|
|
$
77,308
|
|
$
410,842
|
|
$
182,279
|
Add: Interest expense
on convertible senior notes
|
25
|
|
617
|
|
37
|
|
617
|
Non-GAAP net income
attributable to common stockholders, diluted
|
$
99,872
|
|
$
77,925
|
|
$
410,879
|
|
$
182,896
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
198,687
|
|
188,717
|
|
196,675
|
|
185,760
|
Effect of dilutive
securities
|
8,474
|
|
19,797
|
|
11,322
|
|
17,929
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
207,161
|
|
208,514
|
|
207,997
|
|
203,689
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
(0.15)
|
|
$
(0.38)
|
|
$
(0.36)
|
|
$
(1.31)
|
Non-GAAP net income
per share, basic
|
0.50
|
|
0.41
|
|
2.09
|
|
0.98
|
Non-GAAP net income
per share, diluted
|
0.48
|
|
0.37
|
|
1.98
|
|
0.90
|
|
(1) Represents net
change in tax liabilities related to an intercompany IP
transfer
|
|
Computation of
free cash flow:
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
$
87,793
|
|
$
62,233
|
|
$
506,467
|
|
$
296,954
|
Less: Purchases of
property and equipment
|
(17,470)
|
|
(18,251)
|
|
(61,396)
|
|
(82,395)
|
Non-GAAP free cash
flow
|
70,323
|
|
43,982
|
|
445,071
|
|
214,559
|
Net cash (used in)
provided by investing activities
|
(5,224)
|
|
(18,835)
|
|
(162,909)
|
|
81,229
|
Net cash (used in)
provided by financing activities
|
$
(73,930)
|
|
$
143,459
|
|
$
(394,621)
|
|
$
(58,976)
|
|
Computation of
billings:
|
|
Three Months
Ended
January 31,
|
|
Year Ended
January 31,
|
(in
thousands)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue
|
$
580,828
|
|
$
430,898
|
|
$
2,107,213
|
|
$
1,453,047
|
Add: Contract
liabilities and refund liability, end of period
|
1,049,106
|
|
800,940
|
|
1,049,106
|
|
800,940
|
Less: Contract
liabilities and refund liability, beginning of period
|
(961,243)
|
|
(702,691)
|
|
(800,940)
|
|
(522,201)
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
19,708
|
|
26,808
|
|
21,021
|
|
15,082
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(18,273)
|
|
(21,021)
|
|
(18,273)
|
|
(21,021)
|
Add: Contract assets
and unbilled accounts receivable contributed by
acquisitions
|
—
|
|
—
|
|
—
|
|
6,589
|
Less: Contract
liabilities and refund liability contributed by
acquisitions
|
—
|
|
—
|
|
—
|
|
(9,344)
|
Non-GAAP
billings
|
$
670,126
|
|
$
534,934
|
|
$
2,358,127
|
|
$
1,723,092
|
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SOURCE DocuSign, Inc.