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Docusign Announces Second Quarter Fiscal 2025 Financial Results

DOCU

SAN FRANCISCO, Sept. 5, 2024 /PRNewswire/ -- Docusign, Inc. (NASDAQ: DOCU) today announced results for its fiscal quarter ended July 31, 2024. Prepared remarks and the news release with the financial results will be accessible on Docusign's website at investor.docusign.com prior to its webcast.

"Docusign continued its evolution with improved business stability and increased efficiency, resulting in record operating profit," said Allan Thygesen, CEO of Docusign. "We're proud that we began shipping our Intelligent Agreement Management platform this quarter and we are encouraged by the early results and customer feedback."

Second Quarter Financial Highlights

  • Total revenue was $736.0 million, an increase of 7% year-over-year. Subscription revenue was $717.4 million, an increase of 7% year-over-year. Professional services and other revenue was $18.7 million, an increase of 2% year-over-year.
  • Billings were $724.5 million, an increase of 2% year-over-year.
  • GAAP gross margin was 78.9% compared to 78.8% in the same period last year. Non-GAAP gross margin was 82.2% compared to 82.3% in the same period last year.
  • GAAP net income per basic share was $4.34 on 205 million shares outstanding compared to $0.04 on 204 million shares outstanding in the same period last year.
  • GAAP net income per diluted share was $4.26 on 208 million shares outstanding compared to $0.04 on 208 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.97 on 208 million shares outstanding compared to $0.72 on 208 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $220.2 million compared to $211.0 million in the same period last year.
  • Free cash flow was $197.9 million compared to $183.6 million in the same period last year.
  • Cash, cash equivalents, restricted cashand investments were $1.0 billion at the end of the quarter.
  • Repurchases of common stock were $200.1 million compared to $30.0 million in the same period last year.

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 Intelligent Agreement Management ("IAM") General Availability: Docusign announced the beginning of general availability for IAM, a new category of AI-powered cloud software that helps streamline and automate agreement processes.

  • IAM Release 1 Availability: IAM applications, which include IAM Core, IAM for Sales, and IAM for CX, are now generally available in the U.S. IAM for CX went live for small and medium-sized commercial customers in North America and Australia. IAM will continue to rollout to enterprise and self-service customers across additional geographies throughout the fiscal year.

Executive Appointments: Docusign announced the following new leaders:

  • Paula Hansen joined Docusign as President and Chief Revenue Officer, leading enterprise and commercial sales and partnership teams worldwide. Most recently, Hansen served as President and Chief Revenue Officer at Alteryx, where she was responsible for leading the global go-to-market organization, which includes worldwide sales, sales engineering, partners, marketing, customer experience, customer support and revenue operations. Prior to Alteryx, she served in senior sales roles at SAP and Cisco.
  • Sagnik Nandy joined Docusign as Chief Technology Officer, leading all aspects of engineering, research and engineering operations. Most recently, Nandy served as President and Chief Development Officer at Okta, where he led product, engineering and design for the Workforce Identity Cloud, which includes Okta's core identity and access management platform. Prior to Okta, he served as VP of Engineering at Google.

Guidance

The company currently expects the following guidance:

  • Quarter ending October 31, 2024 (in millions, except percentages):

Total revenue

$743

to

$747

Subscription revenue

$722

to

$726

Billings

$710

to

$720

Non-GAAP gross margin

81.0 %

to

82.0 %

Non-GAAP operating margin

28.5 %

to

29.5 %

Non-GAAP diluted weighted-average shares outstanding

206

to

211

  • Fiscal Year ending January 31, 2025 (in millions, except percentages):

Total revenue

$2,940

to

$2,952

Subscription revenue

$2,864

to

$2,876

Billings

$2,990

to

$3,030

Non-GAAP gross margin

81.0 %

to

82.0 %

Non-GAAP operating margin

29.0 %

to

29.5 %

Non-GAAP diluted weighted-average shares outstanding

206

to

211

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 September 5, 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. Prepared remarks and the news release with the financial results will also be accessible on Docusign's website prior to the webcast. 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 (EST) September 19, 2024 using the passcode 13748491.

About Docusign

Docusign brings agreements to life. Approximately 1.6 million customers and more than a billion people in over 180 countries use Docusign solutions to accelerate the process of doing business and simplify people's lives. With intelligent agreement management, Docusign unleashes business critical data that is trapped inside of documents. Until now, these were disconnected from business systems of record, costing businesses time, money, and opportunity. Using Docusign IAM, companies can create, commit, and manage agreements with solutions created by the #1 company in e-signature and contract lifecycle management (CLM). Learn more at 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, 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. 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 "Guidance" 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, as well as statements related to our expectations regarding the benefits and rollout of the Docusign IAM platform. 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, 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 maintain or increase 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 successfully execute our go-to-market and sales strategy for our IAM platform; 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, 2024 filed on March 21, 2024, our quarterly report on Form 10-Q for the quarter ended July 31, 2024, which we expect to file on September 6, 2024 with the Securities and Exchange Commission (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, acquisition-related expenses, 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 2024 and fiscal 2025, 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.

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands, except per share data)

2024


2023


2024


2023

Revenue:








Subscription

$ 717,366


$ 669,367


$ 1,408,849


$ 1,308,674

Professional services and other

18,661


18,320


36,818


40,401

Total revenue

736,027


687,687


1,445,667


1,349,075

Cost of revenue:








Subscription

132,372


116,185


258,974


225,127

Professional services and other

23,093


29,397


45,937


56,942

Total cost of revenue

155,465


145,582


304,911


282,069

Gross profit

580,562


542,105


1,140,756


1,067,006

Operating expenses:








Sales and marketing

287,464


294,838


569,108


575,443

Research and development

147,571


135,960


281,891


251,324

General and administrative

87,129


103,884


179,607


208,695

Restructuring and other related charges

597


811


29,721


29,583

Total operating expenses

522,761


535,493


1,060,327


1,065,045

Income from operations

57,801


6,612


80,429


1,961

Interest expense

(544)


(1,592)


(688)


(3,558)

Interest income and other income, net

14,630


17,455


28,739


29,700

Income before provision for (benefit from) income taxes

71,887


22,475


108,480


28,103

Provision for (benefit from) income taxes

(816,324)


15,080


(813,491)


20,169

Net income

$ 888,211


$ 7,395


$ 921,971


$ 7,934

Net income per share attributable to common stockholders:





Basic

$ 4.34


$ 0.04


$ 4.49


$0.04

Diluted

$ 4.26


$ 0.04


$ 4.40


$0.04

Weighted-average shares used in computing net income per share:





Basic

204,604


203,703


205,231


203,177

Diluted

208,274


208,192


209,559


208,284









Stock-based compensation expense included in costs and expenses:





Cost of revenue—subscription

$ 15,593


$ 13,081


$ 29,774


$ 24,438

Cost of revenue—professional services and other

4,998


7,286


9,700


14,016

Sales and marketing

58,778


51,563


105,049


96,889

Research and development

53,430


45,151


97,632


81,148

General and administrative

31,649


34,592


60,169


74,934

Restructuring and other related charges

208


34


4,836


4,988

DOCUSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)





(in thousands)

July 31, 2024


January 31, 2024

Assets




Current assets




Cash and cash equivalents

$ 619,064


$ 797,060

Investments—current

319,289


248,402

Accounts receivable, net

309,885


439,299

Contract assets—current

13,449


15,922

Prepaid expenses and other current assets

81,693


66,984

Total current assets

1,343,380


1,567,667

Investments—noncurrent

102,537


121,977

Property and equipment, net

265,544


245,173

Operating lease right-of-use assets

117,877


123,188

Goodwill

455,519


353,138

Intangible assets, net

90,227


50,905

Deferred contract acquisition costs—noncurrent

427,599


409,627

Deferred tax assets—noncurrent

822,026


2,031

Other assets—noncurrent

129,232


97,584

Total assets

$ 3,753,941


$ 2,971,290

Liabilities and Equity




Current liabilities




Accounts payable

$ 8,116


$ 19,029

Accrued expenses and other current liabilities

93,251


104,037

Accrued compensation

178,603


195,266

Contract liabilities—current

1,307,565


1,320,059

Operating lease liabilities—current

19,769


22,230

Total current liabilities

1,607,304


1,660,621

Contract liabilities—noncurrent

23,020


21,980

Operating lease liabilities—noncurrent

115,832


120,823

Deferred tax liability—noncurrent

18,122


16,795

Other liabilities—noncurrent

28,257


21,332

Total liabilities

1,792,535


1,841,551

Stockholders' equity




Common stock

20


21

Treasury stock

(2,670)


(2,164)

Additional paid-in capital

3,087,650


2,821,461

Accumulated other comprehensive loss

(24,548)


(19,360)

Accumulated deficit

(1,099,046)


(1,670,219)

Total stockholders' equity

1,961,406


1,129,739

Total liabilities and equity

$ 3,753,941


$ 2,971,290

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

Cash flows from operating activities:








Net income

$ 888,211


$ 7,395


$ 921,971


$ 7,934

Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation and amortization

27,022


25,238


51,528


48,105

Amortization of deferred contract acquisition and fulfillment costs

57,255


50,152


111,467


98,382

Amortization of debt discount and transaction costs

139


1,249


277


2,495

Non-cash operating lease costs

4,984


5,751


9,862


11,731

Stock-based compensation expense

164,656


151,707


307,160


296,413

Deferred income taxes

(826,038)


1,797


(824,561)


3,420

Other

3,851


49


5,323


(782)

Changes in operating assets and liabilities:








Accounts receivable

(7,068)


(8,478)


123,571


99,803

Prepaid expenses and other current assets

(6)


2,383


(17,067)


(14,420)

Deferred contract acquisition and fulfillment costs

(68,183)


(56,830)


(131,255)


(113,356)

Other assets

(16,975)


(772)


(15,058)


(8,433)

Accounts payable

(10,412)


(11,273)


(11,575)


(20,294)

Accrued expenses and other liabilities

(4,680)


9,069


(8,160)


10,164

Accrued compensation

25,146


18,270


(19,902)


(3,312)

Contract liabilities

(11,553)


22,171


(16,526)


40,458

Operating lease liabilities

(6,141)


(6,862)


(12,021)


(13,657)

Net cash provided by operating activities

220,208


211,016


475,034


444,651

Cash flows from investing activities:








Cash paid for acquisition, net of acquired cash

(143,611)



(143,611)


Purchases of marketable securities

(103,603)


(120,542)


(223,241)


(174,372)

Maturities of marketable securities

93,509


83,318


175,623


164,017

Purchases of strategic and other investments

(125)


(120)


(625)


(120)

Purchases of property and equipment

(22,280)


(27,379)


(45,033)


(46,436)

Net cash used in investing activities

(176,110)


(64,723)


(236,887)


(56,911)

Cash flows from financing activities:








Repurchases of common stock

(200,076)


(30,008)


(349,138)


(70,480)

Settlement of capped calls, net of related costs




23,688

Payment of tax withholding obligation on net RSU settlement and ESPP purchase

(39,446)


(40,044)


(81,083)


(62,681)

Proceeds from exercise of stock options

454


705


1,089


832

Proceeds from employee stock purchase plan



20,190


18,390

Net cash used in financing activities

(239,068)


(69,347)


(408,942)


(90,251)

Effect of foreign exchange on cash, cash equivalents and restricted cash

238


1,279


(2,677)


2,290

Net increase (decrease) in cash, cash equivalents and restricted cash

(194,732)


78,225


(173,472)


299,779

Cash, cash equivalents and restricted cash at beginning of period (1)

822,759


944,755


801,499


723,201

Cash, cash equivalents and restricted cash at end of period (1)

$ 628,027


$ 1,022,980


$ 628,027


$ 1,022,980

(1) Cash, cash equivalents and restricted cash included restricted cash of $9.0 million and $4.4 million at July 31, 2024 and January 31, 2024.

DOCUSIGN, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)


Reconciliation of gross profit (loss) and gross margin:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

GAAP gross profit

$ 580,562


$ 542,105


$ 1,140,756


$ 1,067,006

Add: Stock-based compensation

20,591


20,367


39,474


38,454

Add: Amortization of acquisition-related intangibles

3,067


2,314


5,137


4,717

Add: Employer payroll tax on employee stock transactions

816


713


1,839


1,387

Add: Lease-related impairment and lease-related charges


292



721

Non-GAAP gross profit

$ 605,036


$ 565,791


$ 1,187,206


$ 1,112,285

GAAP gross margin

78.9 %


78.8 %


78.9 %


79.1 %

Non-GAAP adjustments

3.3 %


3.5 %


3.1 %


3.3 %

Non-GAAP gross margin

82.2 %


82.3 %


82.0 %


82.4 %









GAAP subscription gross profit

$ 584,994


$ 553,182


$ 1,149,875


$ 1,083,547

Add: Stock-based compensation

15,593


13,081


29,774


24,438

Add: Amortization of acquisition-related intangibles

3,067


2,314


5,137


4,717

Add: Employer payroll tax on employee stock transactions

595


465


1,387


930

Add: Lease-related impairment and lease-related charges


206



505

Non-GAAP subscription gross profit

$ 604,249


$ 569,248


$ 1,186,173


$ 1,114,137

GAAP subscription gross margin

81.5 %


82.6 %


81.6 %


82.8 %

Non-GAAP adjustments

2.7 %


2.4 %


2.6 %


2.3 %

Non-GAAP subscription gross margin

84.2 %


85.0 %


84.2 %


85.1 %









GAAP professional services and other gross loss

$ (4,432)


$ (11,077)


$ (9,119)


$ (16,541)

Add: Stock-based compensation

4,998


7,286


9,700


14,016

Add: Employer payroll tax on employee stock transactions

221


248


452


457

Add: Lease-related impairment and lease-related charges


86



216

Non-GAAP professional services and other gross profit

$ 787


$ (3,457)


$ 1,033


$ (1,852)

GAAP professional services and other gross margin

(23.8) %


(60.4) %


(24.8) %


(40.9) %

Non-GAAP adjustments

28.0 %


41.5 %


27.6 %


36.3 %

Non-GAAP professional services and other gross margin

4.2 %


(18.9) %


2.8 %


(4.6) %

Reconciliation of operating expenses:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

GAAP sales and marketing

$ 287,464


$ 294,838


$ 569,108


$ 575,443

Less: Stock-based compensation

(58,778)


(51,563)


(105,049)


(96,889)

Less: Amortization of acquisition-related intangibles

(3,113)


(2,630)


(5,742)


(5,259)

Less: Employer payroll tax on employee stock transactions

(1,595)


(1,400)


(3,733)


(3,070)

Less: Lease-related impairment and lease-related charges


(815)



(2,171)

Non-GAAP sales and marketing

$ 223,978


$ 238,430


$ 454,584


$ 468,054

GAAP sales and marketing as a percentage of revenue

39.1 %


42.9 %


39.4 %


42.7 %

Non-GAAP sales and marketing as a percentage of revenue

30.4 %


34.7 %


31.4 %


34.7 %









GAAP research and development

$ 147,571


$ 135,960


$ 281,891


$ 251,324

Less: Stock-based compensation

(53,430)


(45,151)


(97,632)


(81,148)

Less: Employer payroll tax on employee stock transactions

(1,754)


(1,387)


(4,319)


(2,795)

Less: Lease-related impairment and lease-related charges


(381)



(873)

Non-GAAP research and development

$ 92,387


$ 89,041


$ 179,940


$ 166,508

GAAP research and development as a percentage of revenue

20.0 %


19.8 %


19.5 %


18.6 %

Non-GAAP research and development as a percentage of revenue

12.6 %


12.9 %


12.4 %


12.3 %









GAAP general and administrative

$ 87,129


$ 103,884


$ 179,607


$ 208,695

Less: Stock-based compensation

(31,649)


(34,592)


(60,169)


(74,934)

Less: Employer payroll tax on employee stock transactions

(607)


(546)


(1,285)


(978)

Less: Acquisition-related expenses

(3,358)



(4,716)


Less: Lease-related impairment and lease-related charges


(296)



(695)

Non-GAAP general and administrative

$ 51,515


$ 68,450


$ 113,437


$ 132,088

GAAP general and administrative as a percentage of revenue

11.8 %


15.1 %


12.4 %


15.4 %

Non-GAAP general and administrative as a percentage of revenue

7.0 %


10.0 %


7.8 %


9.8 %

Reconciliation of income from operations and operating margin:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

GAAP income from operations

$ 57,801


$ 6,612


$ 80,429


$ 1,961

Add: Stock-based compensation

164,448


151,673


302,324


291,425

Add: Amortization of acquisition-related intangibles

6,180


4,944


10,879


9,976

Add: Employer payroll tax on employee stock transactions

4,772


4,046


11,176


8,230

Add: Acquisition-related expenses

3,358



4,716


Add: Restructuring and other related charges

597


811


29,721


29,583

Add: Lease-related impairment and lease-related charges


1,784



4,460

Non-GAAP income from operations

$ 237,156


$ 169,870


$ 439,245


$ 345,635

GAAP operating margin

7.9 %


1.0 %


5.6 %


0.1 %

Non-GAAP adjustments

24.3 %


23.7 %


24.8 %


25.5 %

Non-GAAP operating margin

32.2 %


24.7 %


30.4 %


25.6 %

Reconciliation of net income and net income per share, basic and diluted:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands, except per share data)

2024


2023


2024


2023

GAAP net income

$ 888,211


$ 7,395


$ 921,971


$ 7,934

Add: Stock-based compensation

164,448


151,673


302,324


291,425

Add: Amortization of acquisition-related intangibles

6,180


4,944


10,879


9,976

Add: Employer payroll tax on employee stock transactions

4,772


4,046


11,176


8,230

Add: Acquisition-related expenses

3,358



4,716


Add: Restructuring and other related charges

597


811


29,721


29,583

Add: Amortization of debt discount and issuance costs


1,294



2,898

Add: Fair value adjustments to strategic investments




119

Add: Lease-related impairment and lease-related charges


1,784



4,460

Add: Income tax and other tax adjustments

(866,572)


(22,325)


(906,950)


(54,790)

Non-GAAP net income

$ 200,994


$ 149,622


$ 373,837


$ 299,835









Numerator:








Non-GAAP net income

$ 200,994


$ 149,622


$ 373,837


$ 299,835

Add: Interest expense on convertible senior notes


46



403

Non-GAAP net income attributable to common stockholders, diluted

$ 200,994


$ 149,668


$ 373,837


$ 300,238









Denominator:








Weighted-average common shares outstanding, basic

204,604


203,703


205,231


203,177

Effect of dilutive securities

3,670


4,489


4,328


5,107

Non-GAAP weighted-average common shares outstanding, diluted

208,274


208,192


209,559


208,284









GAAP net income per share, basic

$ 4.34


$ 0.04


$ 4.49


$ 0.04

GAAP net income per share, diluted

$ 4.26


$ 0.04


$ 4.40


$ 0.04

Non-GAAP net income per share, basic

$ 0.98


$ 0.73


$ 1.82


$ 1.48

Non-GAAP net income per share, diluted

$ 0.97


$ 0.72


$ 1.78


$ 1.44

Computation of free cash flow:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

Net cash provided by operating activities

$ 220,208


$ 211,016


$ 475,034


$ 444,651

Less: Purchases of property and equipment

(22,280)


(27,379)


(45,033)


(46,436)

Non-GAAP free cash flow

$ 197,928


$ 183,637


$ 430,001


$ 398,215

Net cash used in investing activities

$ (176,110)


$ (64,723)


$ (236,887)


$ (56,911)

Net cash used in financing activities

$ (239,068)


$ (69,347)


$ (408,942)


$ (90,251)

Computation of billings:


Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2024


2023


2024


2023

Revenue

$ 736,027


$ 687,687


$ 1,445,667


$ 1,349,075

Add: Contract liabilities and refund liability, end of period

1,334,461


1,233,894


1,334,461


1,233,894

Less: Contract liabilities and refund liability, beginning of period

(1,340,680)


(1,210,965)


(1,343,792)


(1,191,269)

Add: Contract assets and unbilled accounts receivable, beginning of period

17,179


22,936


20,189


16,615

Less: Contract assets and unbilled accounts receivable, end of period

(17,461)


(22,358)


(17,461)


(22,358)

Add: Contract assets and unbilled accounts receivable by acquisitions

53



53


Less: Contract liabilities and refund liability contributed by acquisitions

(5,071)



(5,071)


Non-GAAP billings

$ 724,508


$ 711,194


$ 1,434,046


$ 1,385,957

Cision View original content:https://www.prnewswire.com/news-releases/docusign-announces-second-quarter-fiscal-2025-financial-results-302238864.html

SOURCE DocuSign, Inc.



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