DocuSign Announces Fourth Quarter and Fiscal Year 2024 Financial Results

SAN FRANCISCO, March 7, 2024 /PRNewswire/ — DocuSign, Inc. (NASDAQ: DOCU), which offers the world’s #1 e-signature product as part of its industry leading lineup, today announced results for its fourth quarter and fiscal year ended January 31, 2024.

“DocuSign ended Fiscal 2024 with momentum in product innovation, customer growth, and financial performance, including more than doubling free cash flow year-over-year,” said Allan Thygesen, CEO of DocuSign. “The agreement management opportunity is massive, and we’re excited to deliver category-defining innovation to our 1.5 million customers in Fiscal 2025 and beyond.”

Fourth Quarter Financial Highlights

• Total revenue was $712.4 million, an increase of 8% year-over-year. Subscription revenue was $695.7 million, an increase of 8% year-over-year. Professional services and other revenue was $16.7 million, an increase of 5% year-over-year.
• Billings were $833.1 million, an increase of 13% year-over-year.
• GAAP gross margin was 79% for both periods. Non-GAAP gross margin was 82% compared to 83% in the same period last year.
• GAAP net income per basic share was $0.13 on 206 million shares outstanding compared to $0.02 on 202 million shares outstanding in the same period last year.
• GAAP net income per diluted share was $0.13 on 210 million shares outstanding compared to $0.02 on 206 million shares outstanding in the same period last year.
• Non-GAAP net income per diluted share was $0.76 on 210 million shares outstanding compared to $0.65 on 206 million shares outstanding in the same period last year.
• Net cash provided by operating activities was $270.7 million compared to $137.1 million in the same period last year.
• Free cash flow was $248.6 million compared to $113.0 million in the same period last year.
• Cash, cash equivalents, restricted cash and investments were $1.2 billion at the end of the quarter. During the quarter, the company repaid $689.9 million principal amount of our 2024 convertible senior notes.

Fiscal 2024 Financial Highlights

• Total revenue was $2.8 billion, an increase of 10% over the prior year. Subscription revenue was $2.7 billion, an increase of 10% over the prior year. Professional services and other revenue was $75.2 million, an increase of 2% year-over-year.
• Billings were $2.9 billion, an increase of 9% over the prior year.
• GAAP gross margin was 79% for both years. Non-GAAP gross margin was 83% compared to 82% in the prior year.
• GAAP net income per basic share was $0.36 on 204 million shares outstanding compared to a loss of $0.49 on 201 million shares outstanding in fiscal 2023.
• GAAP net income per diluted share was $0.36 on 209 million shares outstanding compared to a loss of $0.49 on 201 million shares outstanding in fiscal 2023.
• Non-GAAP net income per diluted share was $2.98 on 209 million shares outstanding compared to $2.03 on 206 million shares outstanding in fiscal 2023.

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 Achieves StateRAMP Authorization: State, local and education customers can now use DocuSign solutions like Contract Lifecycle Management (CLM) and eSignature (DocuSign Federal) in the StateRAMP-authorized environment. Customers will be able to reclaim the time spent on paper-intensive, manual processes and improve constituent experiences while increasing information security.
• DocuSign 2023 Release 4: DocuSign announced new product capabilities for generating agreements, creating better signing experiences and managing end-to-end agreements. Highlights of our recent product release include:
  • Identity Wallet for Qualified Electronic Signatures (QES): Further simplifies the QES agreement process for repeat signers by pairing their Identity Wallet with their mobile or desktop passkey and leveraging built-in biometric including FaceID and fingerprint scans. Signers enjoy a streamlined identification process, and organizations achieve faster completions for their most important documents.
  • Modernized DocuSign CLM search experience: We’ve made it easier for users to access agreements and leverage AI across their contracts. Our new modern search experience makes agreements more discoverable and actionable, allowing users to save customized searches most relevant to their role, filter for specific contract attributes, and execute bulk actions such as downloading or exporting agreements right from the results page.

Outlook

The company currently expects the following guidance:

▪  Quarter ending April 30, 2024 (in millions, except percentages):

Total revenue	$704	to	$708
Subscription revenue	$686	to	$690
Billings	$685	to	$695
Non-GAAP gross margin	81.0 %	to	82.0 %
Non-GAAP operating margin	27.0 %	to	28.0 %
Non-GAAP diluted weighted-average shares outstanding	208	to	213

▪  Fiscal year ending January 31, 2025 (in millions, except percentages):

Total revenue	$2,915	to	$2,927
Subscription revenue	$2,843	to	$2,855
Billings	$2,970	to	$3,024
Non-GAAP gross margin	81.0 %	to	82.0 %
Non-GAAP operating margin	26.5 %	to	28.0 %
Non-GAAP diluted weighted-average shares outstanding	208	to	213

A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by many factors, including the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release.

Webcast Conference Call Information

The company will host a conference call on March 7, 2024 at 2:00 p.m. PT (5:00 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 21, 2024, using the passcode 13743590.

About DocuSign

DocuSign redefines how the world comes together and agrees, making agreements smarter, easier and more trusted. As part of its industry leading product lineup, DocuSign offers eSignature, the world’s #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, over 1.5 million customers and more than a billion users in over 180 countries use DocuSign products and solutions to accelerate the process of doing business and simplify people’s lives. For more information, visit http://www.docusign.com.

Copyright 2024. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

Investor Relations:

DocuSign Investor Relations

investors@docusign.com

Media Relations:

DocuSign Corporate Communications

media@docusign.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, objectives for future operations, and the impact of such assumptions on our financial condition and results of operations are forward-looking statements. Forward-looking statements in this press release also include, among other things, statements under “Outlook” above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as our anticipated future products and product strategy, as well as statements related to our expectations regarding customer acceptance of those products. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

Forward-looking statements contained in this press release include, but are not limited to, statements about: our expectations regarding global macro-economic conditions, including the effects of inflation, volatile interest rates, instability in the global banking sector, and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market; our ability to compete effectively in an evolving and competitive market; the impact of any data breaches, cyberattacks or other malicious activity on our technology systems; our ability to effectively sustain and manage our growth and future expenses and achieve and maintain future profitability; our ability to attract new customers and maintain and expand our existing customer base; our ability to effectively implement and execute our restructuring plans; our ability to scale and update our platform to respond to customers’ needs and rapid technological change, including our ability to successfully incorporate generative artificial intelligence into our existing and future products; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to retain our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions and to successfully integrate and realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility or other indebtedness; our ability to realize the anticipated benefits of our stock repurchase program; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel, including executive level management; our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts; our ability to successfully implement and maintain new and existing information technology systems, including our ERP system; and our ability to maintain proper and effective internal controls.

Additional risks and uncertainties that could affect our financial results are included in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended January 31, 2023 filed on March 27, 2023 with the Securities and Exchange Commission (the “SEC”), quarterly report on Form 10-Q for the quarter ended October 31, 2023 filed on December 8, 2023 with the SEC, and other filings that we make from time to time with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this press release or to conform such statements to actual results or revised expectations, except as required by law.

Non-GAAP Financial Measures and Other Key Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We present these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, these non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges, as these costs are not reflective of ongoing operations and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023 and fiscal 2024, we have determined the projected non-GAAP tax rate to be 20%.

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 can be used to measure our periodic performance, when taking into consideration the timing aspects of customer renewals, which represents a large component of our business. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended January 31,				Year Ended January 31,
(in thousands, except per share data)	2024		2023		2024		2023
Revenue:
Subscription	nbsp;  695,682		nbsp;  643,677		nbsp; 2,686,708		nbsp; 2,442,177
Professional services and other	16,704		15,899		75,174		73,738
Total revenue	712,386		659,576		2,761,882		2,515,915
Cost of revenue:
Subscription	120,551		110,463		459,905		426,077
Professional services and other	27,356		26,963		112,716		110,011
Total cost of revenue	147,907		137,426		572,621		536,088
Gross profit	564,479		522,150		2,189,261		1,979,827
Operating expenses:
Sales and marketing	300,221		304,649		1,168,137		1,242,711
Research and development	151,524		125,891		539,488		480,584
General and administrative	102,711		91,641		419,621		316,228
Restructuring and other related charges	88		253		30,381		28,335
Total operating expenses	554,544		522,434		2,157,627		2,067,858
Income (loss) from operations	9,935		(284)		31,634		(88,031)
Interest expense	(1,709)		(1,652)		(6,844)		(6,389)
Interest income and other income, net	21,516		7,366		68,889		4,539
Income (loss) before provision for income taxes	29,742		5,430		93,679		(89,881)
Provision for income taxes	2,501		567		19,699		7,573
Net income (loss)	nbsp;   27,241		nbsp;     4,863		nbsp;   73,980		nbsp;  (97,454)
Net income (loss) per share attributable to common stockholders:
Basic	nbsp;       0.13		nbsp;       0.02		nbsp;       0.36		nbsp;      (0.49)
Diluted	nbsp;       0.13		nbsp;       0.02		nbsp;       0.36		nbsp;      (0.49)
Weighted-average shares used in computing net income (loss) per share:
Basic	205,514		201,894		204,070		200,903
Diluted	209,581		206,260		208,950		200,903
Stock-based compensation expense included in costs and expenses:
Cost of revenue—subscription	nbsp;    13,517		nbsp;    11,644		nbsp;    51,660		nbsp;    46,916
Cost of revenue—professional services and other	6,977		7,431		28,336		25,758
Sales and marketing	53,251		55,760		203,855		222,334
Research and development	54,753		41,278		184,211		149,967
General and administrative	32,502		29,810		143,773		88,125
Restructuring and other related charges	16		36		5,012		5,626

 

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)	January 31, 2024		January 31, 2023
Assets
Current assets
Cash and cash equivalents	nbsp;           797,060		nbsp;           721,895
Investments—current	248,402		309,771
Accounts receivable, net	439,299		516,914
Contract assets—current	15,922		12,437
Prepaid expenses and other current assets	66,984		69,987
Total current assets	1,567,667		1,631,004
Investments—noncurrent	121,977		186,049
Property and equipment, net	245,173		199,892
Operating lease right-of-use assets	123,188		141,493
Goodwill	353,138		353,619
Intangible assets, net	50,905		70,280
Deferred contract acquisition costs—noncurrent	409,627		350,899
Other assets—noncurrent	99,615		79,484
Total assets	nbsp;        2,971,290		nbsp;        3,012,720
Liabilities and Equity
Current liabilities
Accounts payable	nbsp;            19,029		nbsp;            24,393
Accrued expenses and other current liabilities	104,037		100,987
Accrued compensation	195,266		163,133
Convertible senior notes—current	—		722,887
Contract liabilities—current	1,320,059		1,172,867
Operating lease liabilities—current	22,230		24,055
Total current liabilities	1,660,621		2,208,322
Contract liabilities—noncurrent	21,980		16,925
Operating lease liabilities—noncurrent	120,823		141,348
Deferred tax liability—noncurrent	16,795		10,723
Other liabilities—noncurrent	21,332		18,115
Total liabilities	1,841,551		2,395,433
Stockholders’ equity
Common stock	21		20
Treasury stock	(2,164)		(1,785)
Additional paid-in capital	2,821,461		2,240,732
Accumulated other comprehensive loss	(19,360)		(22,996)
Accumulated deficit	(1,670,219)		(1,598,684)
Total stockholders’ equity	1,129,739		617,287
Total liabilities and equity	nbsp;        2,971,290		nbsp;        3,012,720

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Three Months Ended January 31,				Year Ended January 31,
(in thousands)	2024		2023		2024		2023
Cash flows from operating activities:
Net income (loss)	nbsp;     27,241		nbsp;       4,863		nbsp;     73,980		nbsp;   (97,454)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	23,633		22,279		95,062		86,255
Amortization of deferred contract acquisition and fulfillment costs	52,382		50,664		200,163		185,045
Amortization of debt discount and transaction costs	1,027		1,245		4,749		4,970
Non-cash operating lease costs	4,811		7,033		21,310		27,501
Stock-based compensation expense	161,016		145,961		616,847		538,726
Deferred income taxes	(973)		(1,348)		6,292		1,697
Other	(551)		2,183		(1,904)		15,723
Changes in operating assets and liabilities
Accounts receivable	(81,221)		(94,302)		71,681		(75,964)
Prepaid expenses and other current assets	7,300		2,555		(657)		(5,038)
Deferred contract acquisition and fulfillment costs	(78,649)		(70,695)		(255,159)		(232,315)
Other assets	(1,413)		(6,612)		(15,432)		(22,319)
Accounts payable	4,263		(24,701)		(4,826)		(26,440)
Accrued expenses and other liabilities	4,101		6,467		6,473		7,340
Accrued compensation	38,347		14,046		33,979		(1,781)
Contract liabilities	115,371		86,353		152,247		143,177
Operating lease liabilities	(5,987)		(8,934)		(25,279)		(42,364)
Net cash provided by operating activities	270,698		137,057		979,526		506,759
Cash flows from investing activities:
Purchases of marketable securities	(132,875)		(131,461)		(336,221)		(533,710)
Maturities of marketable securities	222,352		112,148		473,869		423,917
Purchases of strategic and other investments	(125)		(125)		(645)		(3,750)
Purchases of property and equipment	(22,114)		(24,064)		(92,391)		(77,654)
Net cash provided by (used in) by investing activities	67,238		(43,502)		44,612		(191,197)
Cash flows from financing activities:
Repayments of convertible senior notes	(689,896)		—		(726,979)		(16)
Repurchases of common stock	—		—		(145,515)		(63,041)
Settlement of capped calls, net of related costs	—		—		23,688		—
Payment of tax withholding obligation on net RSU settlement and ESPP purchase	(45,922)		(17,283)		(144,218)		(84,403)
Proceeds from exercise of stock options	784		1,669		13,991		12,678
Proceeds from employee stock purchase plan	—		—		32,994		36,526
Net cash used in financing activities	(735,034)		(15,614)		(946,039)		(98,256)
Effect of foreign exchange on cash, cash equivalents and restricted cash	5,096		10,868		199		(3,784)
Net increase (decrease) in cash, cash equivalents and restricted cash	(392,002)		88,809		78,298		213,522
Cash, cash equivalents and restricted cash at beginning of period (1)	1,193,501		634,392		723,201		509,679
Cash, cash equivalents and restricted cash at end of period (1)	nbsp;  801,499		nbsp;  723,201		nbsp;  801,499		nbsp;  723,201
(1) Cash, cash equivalents and restricted cash included restricted cash of $4.4 million and $1.3 million as of January 31, 2024 and January 31, 2023.

 

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)	2024		2023		2024		2023
GAAP gross profit	nbsp; 564,479		nbsp; 522,150		$ 2,189,261		$ 1,979,827
Add: Stock-based compensation	20,494		19,075		79,996		72,674
Add: Amortization of acquisition-related intangibles	2,070		2,382		8,857		9,613
Add: Employer payroll tax on employee stock transactions	337		392		2,262		2,184
Add: Lease-related impairment and lease-related charges	—		412		721		1,090
Non-GAAP gross profit	nbsp; 587,380		nbsp; 544,411		$ 2,281,097		$ 2,065,388
GAAP gross margin	79 %		79 %		79 %		79 %
Non-GAAP adjustments	3 %		4 %		4 %		3 %
Non-GAAP gross margin	82 %		83 %		83 %		82 %
GAAP subscription gross profit	nbsp; 575,131		nbsp; 533,214		$ 2,226,803		$ 2,016,100
Add: Stock-based compensation	13,517		11,644		51,660		46,916
Add: Amortization of acquisition-related intangibles	2,070		2,382		8,857		9,613
Add: Employer payroll tax on employee stock transactions	232		243		1,464		1,393
Add: Lease-related impairment and lease-related charges	—		126		505		447
Non-GAAP subscription gross profit	nbsp; 590,950		nbsp; 547,609		$ 2,289,289		$ 2,074,469
GAAP subscription gross margin	83 %		83 %		83 %		83 %
Non-GAAP adjustments	2 %		2 %		2 %		2 %
Non-GAAP subscription gross margin	85 %		85 %		85 %		85 %
GAAP professional services and other gross loss	$ (10,652)		$ (11,064)		nbsp;   (37,542)		nbsp;   (36,273)
Add: Stock-based compensation	6,977		7,431		28,336		25,758
Add: Employer payroll tax on employee stock transactions	105		149		798		791
Add: Lease-related impairment and lease-related charges	—		286		216		643
Non-GAAP professional services and other gross loss	nbsp; (3,570)		nbsp; (3,198)		nbsp;    (8,192)		nbsp;    (9,081)
GAAP professional services and other gross margin	(64) %		(70) %		(50) %		(49) %
Non-GAAP adjustments	43 %		50 %		39 %		37 %
Non-GAAP professional services and other gross margin	(21) %		(20) %		(11) %		(12) %

 

Reconciliation of operating expenses:
	Three Months Ended January 31,				Year Ended January 31,
(in thousands)	2024		2023		2024		2023
GAAP sales and marketing	nbsp; 300,221		nbsp; 304,649		$ 1,168,137		$ 1,242,711
Less: Stock-based compensation	(53,251)		(55,760)		(203,855)		(222,334)
Less: Amortization of acquisition-related intangibles	(2,631)		(2,571)		(10,518)		(11,093)
Less: Employer payroll tax on employee stock transactions	(1,104)		(910)		(5,049)		(6,160)
Less: Lease-related impairment and lease-related charges	—		(1,467)		(2,171)		(3,820)
Non-GAAP sales and marketing	nbsp; 243,235		nbsp; 243,941		nbsp;  946,544		nbsp;  999,304
GAAP sales and marketing as a percentage of revenue	42 %		46 %		42 %		49 %
Non-GAAP sales and marketing as a percentage of revenue	34 %		37 %		34 %		40 %
GAAP research and development	nbsp; 151,524		nbsp; 125,891		nbsp;  539,488		nbsp;  480,584
Less: Stock-based compensation	(54,753)		(41,278)		(184,211)		(149,967)
Less: Employer payroll tax on employee stock transactions	(605)		(460)		(4,276)		(3,469)
Less: Lease-related impairment and lease-related charges	—		(433)		(873)		(1,252)
Non-GAAP research and development	nbsp; 96,166		nbsp; 83,720		nbsp;  350,128		nbsp;  325,896
GAAP research and development as a percentage of revenue	21 %		19 %		20 %		19 %
Non-GAAP research and development as a percentage of revenue	13 %		13 %		13 %		13 %
GAAP general and administrative	nbsp; 102,711		nbsp; 91,641		nbsp;  419,621		nbsp;  316,228
Less: Stock-based compensation	(32,502)		(29,810)		(143,773)		(88,125)
Less: Employer payroll tax on employee stock transactions	(554)		(182)		(2,095)		(1,108)
Less: Lease-related impairment and lease-related charges	—		(364)		(695)		(1,019)
Less: Executive transition costs	—		—		—		(2,634)
Non-GAAP general and administrative	nbsp; 69,655		nbsp; 61,285		nbsp;  273,058		nbsp;  223,342
GAAP general and administrative as a percentage of revenue	15 %		14 %		15 %		13 %
Non-GAAP general and administrative as a percentage of revenue	10 %		9 %		10 %		9 %

 

Reconciliation of income (loss) from operations and operating margin:
	Three Months Ended January 31,				Year Ended January 31,
(in thousands)	2024		2023		2024		2023
GAAP income (loss) from operations	nbsp;  9,935		nbsp;    (284)		nbsp; 31,634		$ (88,031)
Add: Stock-based compensation	161,000		145,923		611,835		533,100
Add: Amortization of acquisition-related intangibles	4,701		4,953		19,375		20,706
Add: Employer payroll tax on employee stock transactions	2,600		1,944		13,682		12,921
Add: Restructuring and other related charges	88		253		30,381		28,335
Add: Lease-related impairment and lease-related charges	—		2,676		4,460		7,181
Add: Executive transition costs	—		—		—		2,634
Non-GAAP income from operations	nbsp; 178,324		nbsp; 155,465		nbsp; 711,367		nbsp; 516,846
GAAP operating margin	1 %		— %		1 %		(3) %
Non-GAAP adjustments	24 %		24 %		25 %		24 %
Non-GAAP operating margin	25 %		24 %		26 %		21 %

 

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)	2024		2023		2024		2023
GAAP net income (loss)	nbsp;    27,241		nbsp;     4,863		nbsp;    73,980		nbsp;  (97,454)
Add: Stock-based compensation	161,000		145,923		611,835		533,100
Add: Amortization of acquisition-related intangibles	4,701		4,953		19,375		20,706
Add: Employer payroll tax on employee stock transactions	2,600		1,944		13,682		12,921
Add: Amortization of debt discount and issuance costs	1,027		1,291		5,175		4,970
Add: Fair value adjustments to strategic investments	(98)		4,073		22		3,689
Add: Restructuring and other related charges	88		253		30,381		28,335
Add: Lease-related impairment and lease-related charges	—		2,676		4,460		7,181
Add: Executive transition costs	—		—		—		2,634
Add: Income Tax effect of non-GAAP adjustments	(37,311)		(32,742)		(136,023)		(97,158)
Non-GAAP net income	nbsp;  159,248		nbsp;  133,234		nbsp;  622,887		nbsp;  418,924
Numerator:
Non-GAAP net income	nbsp;  159,248		nbsp;  133,234		nbsp;  622,887		nbsp;  418,924
Add: Interest expense on convertible senior notes	—		46		425		29
Non-GAAP net income attributable to common stockholders, diluted	nbsp;  159,248		nbsp;  133,280		nbsp;  623,312		nbsp;  418,953
Denominator:
Weighted-average common shares outstanding, basic	205,514		201,894		204,070		200,903
Effect of dilutive securities	4,067		4,366		4,880		5,595
Non-GAAP weighted-average common shares outstanding, diluted	209,581		206,260		208,950		206,498
GAAP net income (loss) per share, basic	nbsp;       0.13		nbsp;       0.02		nbsp;       0.36		nbsp;      (0.49)
GAAP net income (loss) per share, diluted	nbsp;       0.13		nbsp;       0.02		nbsp;       0.36		nbsp;      (0.49)
Non-GAAP net income per share, basic	nbsp;       0.77		nbsp;       0.66		nbsp;       3.05		nbsp;       2.09
Non-GAAP net income per share, diluted	nbsp;       0.76		nbsp;       0.65		nbsp;       2.98		nbsp;       2.03

 

Computation of free cash flow:
	Three Months Ended January 31,				Year Ended January 31,
(in thousands)	2024		2023		2024		2023
Net cash provided by operating activities	nbsp;  270,698		nbsp;  137,057		nbsp;  979,526		nbsp;  506,759
Less: Purchases of property and equipment	(22,114)		(24,064)		(92,391)		(77,654)
Non-GAAP free cash flow	248,584		112,993		887,135		429,105
Net cash provided by (used in) by investing activities	67,238		(43,502)		44,612		(191,197)
Net cash used in financing activities	$ (735,034)		nbsp;  (15,614)		$ (946,039)		nbsp;  (98,256)

 

Computation of billings:
	Three Months Ended January 31,				Year Ended January 31,
(in thousands)	2024		2023		2024		2023
Revenue	nbsp;   712,386		nbsp;   659,576		$ 2,761,882		$ 2,515,915
Add: Contract liabilities and refund liability, end of period	1,343,792		1,191,269		1,343,792		1,191,269
Less: Contract liabilities and refund liability, beginning of period	(1,228,174)		(1,113,131)		(1,191,269)		(1,049,106)
Add: Contract assets and unbilled accounts receivable, beginning of period	25,253		17,945		16,615		18,273
Less: Contract assets and unbilled accounts receivable, end of period	(20,189)		(16,615)		(20,189)		(16,615)
Non-GAAP billings	nbsp;   833,068		nbsp;   739,044		$ 2,910,831		$ 2,659,736

 

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SOURCE DocuSign, Inc.