DocuSign Announces Fourth Quarter and Fiscal Year 2024 Financial Results

Published

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, Inc. (PRNewsFoto/DocuSign, Inc.)

"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 Relationsinvestors@docusign.com

Media Relations:DocuSign Corporate Communicationsmedia@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

$   695,682

$   643,677

$  2,686,708

$  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)

$    27,241

$      4,863

$    73,980

$   (97,454)

Net income (loss) per share attributable to common stockholders:

Basic

$        0.13

$        0.02

$        0.36

$       (0.49)

Diluted

$        0.13

$        0.02

$        0.36

$       (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

$     13,517

$     11,644

$     51,660

$     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

$            797,060

$            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

$         2,971,290

$         3,012,720

Liabilities and Equity

Current liabilities

Accounts payable

$             19,029

$             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

$         2,971,290

$         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)

$      27,241

$        4,863

$      73,980

$    (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)

$   801,499

$   723,201

$   801,499

$   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

$  564,479

$  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

$  587,380

$  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

$  575,131

$  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

$  590,950

$  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)

$    (37,542)

$    (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

$  (3,570)

$  (3,198)

$     (8,192)

$     (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

$  300,221

$  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

$  243,235

$  243,941

$   946,544

$   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

$  151,524

$  125,891

$   539,488

$   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

$  96,166

$  83,720

$   350,128

$   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

$  102,711

$  91,641

$   419,621

$   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

$  69,655

$  61,285

$   273,058

$   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

$   9,935

$     (284)

$  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

$  178,324

$  155,465

$  711,367

$  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)

$     27,241

$      4,863

$     73,980

$   (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

$   159,248

$   133,234

$   622,887

$   418,924

Numerator:

Non-GAAP net income

$   159,248

$   133,234

$   622,887

$   418,924

Add: Interest expense on convertible senior notes

46

425

29

Non-GAAP net income attributable to common stockholders, diluted

$   159,248

$   133,280

$   623,312

$   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

$        0.13

$        0.02

$        0.36

$       (0.49)

GAAP net income (loss) per share, diluted

$        0.13

$        0.02

$        0.36

$       (0.49)

Non-GAAP net income per share, basic

$        0.77

$        0.66

$        3.05

$        2.09

Non-GAAP net income per share, diluted

$        0.76

$        0.65

$        2.98

$        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

$   270,698

$   137,057

$   979,526

$   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)

$   (15,614)

$ (946,039)

$   (98,256)

 

Computation of billings:

Three Months Ended January 31,

Year Ended January 31,

(in thousands)

2024

2023

2024

2023

Revenue

$    712,386

$    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

$    833,068

$    739,044

$ 2,910,831

$ 2,659,736

 

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SOURCE DocuSign, Inc.

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