DocuSign Announces Fourth Quarter and Fiscal Year 2022 Financial Results
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DocuSign Announces Fourth Quarter and Fiscal Year 2022 Financial Results

SAN FRANCISCO, March 10, 2022 /PRNewswire/ -- DocuSign, Inc. (NASDAQ: DOCU), which offers the world's #1 e-signature solution as part of the DocuSign Agreement Cloud, today announced results for its fourth quarter and fiscal year ended January 31, 2022.

"In fiscal 2022, we grew revenues by 45% and billings by 37% year-over year, while generating record operating and cash flow margins. While the year unfolded differently than expected, we are proud of the ongoing performance and resilience of our team as we scaled to become a multi-billion dollar company. Together, we helped another 280,000 new customers begin digitizing how they agree as we surpassed 1.17 million total customers overall, " said Dan Springer, CEO of DocuSign. " As we head into Fiscal 2023, digital transformation and the need to agree from anywhere remains a high priority for organizations across the globe. As people begin to return to the office, they are not returning to paper. eSignature and the broader Agreement Cloud will only continue to gain prominence in the evolving Anywhere Economy."

Fourth Quarter Financial Highlights

  • Total revenue was $580.8 million, an increase of 35% year-over-year. Subscription revenue was $564.0 million, an increase of 37% year-over-year. Professional services and other revenue was $16.8 million, a decrease of 19% year-over-year.
  • Billings were $670.1 million, an increase of 25% year-over-year.
  • GAAP gross margin was 77%, compared to 76% in the same period last year. Non-GAAP gross margin was 81% compared to 80% in the same period last year.
  • GAAP net loss per basic and diluted share was $0.15 on 199 million shares outstanding compared to $0.38 on 189 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.48 on 207 million shares outstanding compared to $0.37 on 209 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $87.8 million compared to $62.2 million in the same period last year.
  • Free cash flow was $70.3 million compared to $44.0 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $898.4 million at the end of the quarter.

Fiscal 2022 Financial Highlights

  • Total revenue was $2.1 billion, an increase of 45% year-over-year. Subscription revenue was $2.0 billion, an increase of 47% year-over-year. Professional services and other revenue was $69.9 million, a decrease of 2% year-over-year.
  • Billings were $2.4 billion, an increase of 37% year-over-year.
  • GAAP gross margin was 78%, compared to 75% in fiscal 2021. Non-GAAP gross margin was 82%, compared to 79% in fiscal 2021.
  • GAAP net loss per basic and diluted share was $0.36 on 197 million shares outstanding compared to $1.31 on 186 million shares outstanding in fiscal 2021.
  • Non-GAAP net income per diluted share was $1.98 on 208 million shares outstanding compared to $0.90 on 204 million shares outstanding in fiscal 2021.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Other Key Metrics."

Stock Repurchase Authorization

  • DocuSign's Board of Directors has authorized a stock repurchase program of up to $200 million of DocuSign's outstanding common stock. The program has no minimum purchase commitment and no mandated end date. The repurchase is expected to be executed, subject to general business and market conditions and other investment opportunities, through open market purchases, and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased common stock will be determined by DocuSign's management based on its evaluation of market conditions and other factors. The repurchase program does not obligate DocuSign to acquire any particular amount of common stock and the repurchase program may be suspended or discontinued at any time at DocuSign's discretion without prior notice.

Operational and Other Financial Highlights

  • Partnership with Zoom: On February 15, 2022, DocuSign and Zoom Communications announced a partnership to make it even easier to complete agreements from anywhere. DocuSign eSignature for Zoom enables organizations to reimagine agreement processes with virtual, face-to-face signing experiences that accelerate time to agreement while building trust and loyalty. Through this partnership, signers can find, review and complete agreements live within Zoom. DocuSign eSignature for Zoom can also safeguard agreements by automatically verifying a signer's government-issued photo ID or eID in real-time with ID Verification.
  • Chief Diversity & Engagement Officer appointment. On March 7, 2022, DocuSign announced Iesha Berry as its new Chief Diversity & Engagement Officer. Prior to joining DocuSign, Iesha served as the first Chief Inclusion, Diversity and Equity Officer for Slalom where she led the company's diversity and inclusion programs, as well as its environmental, social responsibility, and sustainability efforts. With more than 20 years' experience with Diversity, Equity & Inclusion roles at companies including Bank of America, Pfizer, Microsoft and Prudential Financial, Iesha will focus on accelerating DocuSign's Diversity, Inclusion and Belonging strategy while building off the existing accomplishments DocuSign has achieved.
  • Updated SMS and Phone Authentication: DocuSign has updated its SMS authentication to provide signers the option of receiving a one-time access passcode via either calls or text messages. This helps signers with a landline phone number to successfully complete authentication.

Outlook

The company currently expects the following guidance:

Quarter ending April 30, 2022 (in millions, except percentages):


Total revenue

$579

to

$583


Subscription revenue

$562

to

$566


Billings

$573

to

$583


Non-GAAP gross margin

79%

to

81%


Non-GAAP operating margin

16%

to

18%


Non-GAAP diluted weighted-average shares outstanding

205

to

210



Fiscal year ending January 31, 2023 (in millions, except percentages):


Total revenue

$2,470

to

$2,482


Subscription revenue

$2,394

to

$2,406


Billings

$2,706

to

$2,726


Non-GAAP gross margin

79%

to

81%


Non-GAAP operating margin

16%

to

18%


Provision for income taxes

$4

to

$8


Non-GAAP diluted weighted-average shares outstanding

205

to

210

The company has not reconciled its guidance of non-GAAP financial measures to the corresponding GAAP measures because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation has not been provided.

Webcast Conference Call Information

The company will host a conference call on March 10, 2022 at 1:30 p.m. PT (4:30 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) March 24, 2022, using the passcode 13727117.

About DocuSign

DocuSign helps organizations connect and automate how they prepare, sign, act on, and manage agreements. As part of the DocuSign Agreement Cloud, DocuSign offers eSignature, the world's #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, over a million customers and more than a billion users in over 180 countries use the DocuSign Agreement Cloud to accelerate the process of doing business and simplify people's lives.

For more information, visit www.docusign.com, call +1-877-720-2040, or follow @DocuSign on Twitter, LinkedIn, Facebook and Instagram.

Copyright 2022. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

Investor Relations:
DocuSign Investor Relations
investors@docusign.com

Media Relations:
DocuSign Corporate Communications
media@docusign.com

Forward-Looking Statements

This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to management. and which statements involve substantial risk and uncertainties. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, among other things, statements under "Outlook" above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as customer growth, as well as statements related to our expectations regarding the benefits of the DocuSign Agreement Cloud and DocuSign's intention to implement a program to repurchase up to $200 million of DocuSign's common stock, including the expected timing, duration, volume and nature of such stock repurchase program. They also include statements about our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations. These statements are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

These risks and uncertainties include, among other things, risks related to our expectations regarding the impact of the COVID-19 pandemic, including the easing of related regulations and measures as the pandemic and its related effects begin to abate or have abated, on our business, results of operations, financial condition, and future profitability and growth; our expectations regarding the impact of the evolving COVID-19 pandemic on the businesses of our customers, partners and suppliers, and the economy, as well as the macro- and micro-effects of the pandemic, including the pace of the digital transformation of business and differing levels of demand for our products as our customers' priorities, resources, financial conditions and economic outlook change; our ability to estimate the size of our total addressable market, and the development of the market for our products, which is new and evolving; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers and maintain and expand our existing customer base; our ability to scale and update our platform to respond to customers' needs and rapid technological change; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; the impact of any data breaches, cyberattacks or other malicious activity on our technology systems; our ability to identify targets for and execute potential acquisitions; our ability to successfully integrate the operations of businesses we may acquire, and to realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility or other indebtedness; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel; our ability to estimate the size and potential growth of our target market; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts or related government sanctions; and our ability to maintain proper and effective internal controls. Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our quarterly report on Form 10-Q for the quarter ended October 31, 2021 filed on December 6, 2021 with the Securities and Exchange Commission (the "SEC"), and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Non-GAAP Financial Measures and Other Key Metrics

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

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

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, loss on extinguishment of debt, fair value adjustments to strategic investments, impairment of operating lease right-of-use assets, tax impact related to an intercompany IP transfer and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods.

Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings is a key metric to measure our periodic performance. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

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

 

DOCUSIGN, INC.  

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended
January 31,


Year Ended
January 31,

(in thousands, except per share data)

2022


2021


2022


2021

Revenue:








Subscription

$   564,006


$   410,215


$  2,037,272


$  1,381,397

Professional services and other

16,822


20,683


69,941


71,650

Total revenue

580,828


430,898


2,107,213


1,453,047

Cost of revenue:








Subscription

96,556


73,347


343,661


259,992

Professional services and other

34,898


28,233


122,790


104,066

Total cost of revenue

131,454


101,580


466,451


364,058

Gross profit

449,374


329,318


1,640,762


1,088,989

Operating expenses:








Sales and marketing

299,417


221,896


1,076,527


798,625

Research and development

110,692


80,135


393,362


271,522

General and administrative

64,443


52,184


232,757


192,697

Total operating expenses

474,552


354,215


1,702,646


1,262,844

Loss from operations

(25,178)


(24,897)


(61,884)


(173,855)

Interest expense

(1,617)


(7,786)


(6,443)


(30,799)

Loss on extinguishment of debt


(33,752)



(33,752)

Interest income and other income (expense), net

(2,621)


2,882


1,413


8,914

Loss before provision for income taxes

(29,416)


(63,553)


(66,914)


(229,492)

Provision for income taxes

1,029


8,859


3,062


13,775

Net loss

$   (30,445)


$   (72,412)


$   (69,976)


$  (243,267)

Net loss per share attributable to common stockholders, basic and diluted

$       (0.15)


$       (0.38)


$       (0.36)


$       (1.31)

Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

198,687


188,717


196,675


185,760









Stock-based compensation expense included in costs and expenses:








Cost of revenue—subscription

$      9,500


$      6,138


$     31,152


$     20,793

Cost of revenue—professional services and other

8,096


6,510


27,347


21,865

Sales and marketing

52,040


37,190


186,759


131,041

Research and development

31,712


20,328


108,523


65,890

General and administrative

16,659


13,473


54,761


47,288

 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands)

January 31,
2022


January 31,
2021

Assets




Current assets




Cash and cash equivalents

$            509,059


$            566,055

Investments—current

293,763


207,450

Accounts receivable, net

440,950


323,570

Contract assets—current

12,588


16,883

Prepaid expenses and other current assets

63,236


48,390

Total current assets

1,319,596


1,162,348

Investments—noncurrent

94,938


92,717

Property and equipment, net

184,664


165,039

Operating lease right-of-use assets

126,021


159,352

Goodwill

355,058


350,151

Intangible assets, net

98,816


121,828

Deferred contract acquisition costs—noncurrent

311,835


260,130

Other assets—noncurrent

50,337


24,942

Total assets

$         2,541,265


$         2,336,507

Liabilities and Equity




Current liabilities




Accounts payable

$             52,804


$             37,367

Accrued expenses and other current liabilities

91,377


66,566

Accrued compensation

160,163


156,158

Convertible senior notes—current


20,469

Contract liabilities—current

1,029,891


779,642

Operating lease liabilities—current

37,404


32,971

Total current liabilities

1,371,639


1,093,173

Convertible senior notes, net—noncurrent

718,487


693,219

Contract liabilities—noncurrent

16,725


16,492

Operating lease liabilities—noncurrent

126,340


165,704

Deferred tax liability—noncurrent

9,316


6,464

Other liabilities—noncurrent

23,255


32,328

Total liabilities

2,265,762


2,007,380

Convertible senior notes


3,390

Stockholders' equity




Common stock

20


19

Treasury stock

(1,532)


(1,048)

Additional paid-in capital

1,720,013


1,702,254

Accumulated other comprehensive income (loss)

(4,809)


4,964

Accumulated deficit

(1,438,189)


(1,380,452)

Total stockholders' equity

275,503


325,737

Total liabilities and equity

$         2,541,265


$         2,336,507

 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

Cash flows from operating activities:








Net loss

$    (30,445)


$    (72,412)


$    (69,976)


$  (243,267)

Adjustments to reconcile net loss to net cash provided by operating activities








Depreciation and amortization

20,750


19,635


81,913


71,090

Amortization of deferred contract acquisition and fulfillment costs

43,683


28,597


144,442


99,384

Amortization of debt discount and transaction costs

1,250


7,173


5,098


28,001

Loss on extinguishment of debt


33,752



33,752

Operating cash flow related to repayments of convertible senior notes


(75,165)



(75,165)

Non-cash operating lease costs

6,643


6,646


26,819


26,728

Stock-based compensation expense

118,006


83,639


408,542


286,877

Deferred income taxes

3,729


(1,360)


1,369


(2,410)

Other

4,274


(1,416)


9,871


(210)

Changes in operating assets and liabilities








Accounts receivable

(135,349)


(62,484)


(117,380)


(73,913)

Contract assets

2,471


5,802


4,893


1,912

Prepaid expenses and other current assets

5,816


680


(7,074)


(1,155)

Deferred contract acquisition and fulfillment costs

(59,447)


(63,871)


(207,393)


(208,510)

Other assets

(2,677)


457


(16,389)


(6,006)

Accounts payable

5,445


8,473


12,148


12,128

Accrued expenses and other liabilities

(1,058)


15,203


10,828


37,155

Accrued compensation

23,909


41,033


1,128


64,586

Contract liabilities

89,435


95,230


250,482


267,750

Operating lease liabilities

(8,642)


(7,379)


(32,854)


(21,773)

Net cash provided by operating activities

87,793


62,233


506,467


296,954

Cash flows from investing activities:








Cash paid for acquisition, net of acquired cash



(6,388)


(180,370)

Purchases of marketable securities

(81,366)


(84,340)


(384,128)


(164,989)

Sales of marketable securities

4,499



7,569


28,986

Maturities of marketable securities

90,113


83,756


283,184


488,538

Purchases of strategic and other investments

(1,000)



(1,750)


(8,541)

Purchases of property and equipment

(17,470)


(18,251)


(61,396)


(82,395)

Net cash (used in) provided by investing activities

(5,224)


(18,835)


(162,909)


81,229

Cash flows from financing activities:








Proceeds from issuance of convertible senior notes, net of initial purchasers' discounts and transaction costs


677,370



677,370

Purchase of capped calls related to issuance of convertible senior notes


(31,395)



(31,395)

Repayments of convertible senior notes

(13,071)


(384,199)


(77,906)


(384,199)

Payment of revolving credit facility costs


(2,453)



(2,453)

Payment of tax withholding obligation on RSU settlement and ESPP purchase

(63,412)


(125,186)


(386,521)


(372,463)

Proceeds from exercise of stock options

2,553


9,322


23,729


24,305

Proceeds from employee stock purchase plan



46,077


29,859

Net cash (used in) provided by financing activities

(73,930)


143,459


(394,621)


(58,976)

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

(3,122)


4,214


(5,594)


5,646

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

5,517


191,071


(56,657)


324,853

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

504,162


375,265


566,336


241,483

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

$   509,679


$   566,336


$   509,679


$   566,336



(1)

$0.6 million of restricted cash was included in both Prepaid expenses and other current assets and Other assets—noncurrent at January 31, 2022. $0.3 million of restricted cash was included in Prepaid expenses and other current assets at October 31, 2021 and in Other assets—noncurrent at January 31, 2021 and October 31, 2020.


 

DOCUSIGN, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)


Reconciliation of gross profit and gross margin:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

GAAP gross profit

$ 449,374


$ 329,318


$ 1,640,762


$ 1,088,989

Add: Stock-based compensation

17,596


12,648


58,499


42,658

Add: Amortization of acquisition-related intangibles

2,403


3,196


11,670


11,052

Add: Employer payroll tax on employee stock transactions

829


1,454


7,524


5,904

Non-GAAP gross profit

$ 470,202


$ 346,616


$ 1,718,455


$ 1,148,603

GAAP gross margin

77%


76%


78%


75%

Non-GAAP adjustments

4%


4%


4%


4%

Non-GAAP gross margin

81%


80%


82%


79%









GAAP subscription gross profit

$ 467,450


$ 336,868


$ 1,693,611


$ 1,121,405

Add: Stock-based compensation

9,500


6,138


31,152


20,793

Add: Amortization of acquisition-related intangibles

2,403


3,196


11,670


11,052

Add: Employer payroll tax on employee stock transactions

417


679


3,703


2,862

Non-GAAP subscription gross profit

$ 479,770


$ 346,881


$ 1,740,136


$ 1,156,112

GAAP subscription gross margin

83%


82%


83%


81%

Non-GAAP adjustments

2%


3%


2%


3%

Non-GAAP subscription gross margin

85%


85%


85%


84%









GAAP professional services and other gross loss

$ (18,076)


$  (7,550)


$ (52,849)


$ (32,416)

Add: Stock-based compensation

8,096


6,510


27,347


21,865

Add: Employer payroll tax on employee stock transactions

412


775


3,821


3,042

Non-GAAP professional services and other gross loss

$  (9,568)


$     (265)


$ (21,681)


$  (7,509)

GAAP professional services and other gross margin

(107)%


(37)%


(76)%


(45)%

Non-GAAP adjustments

50%


36%


45%


35%

Non-GAAP professional services and other gross margin

(57)%


(1)%


(31)%


(10)%


Reconciliation of operating expenses:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

GAAP sales and marketing

$ 299,417


$ 221,896


$ 1,076,527


$ 798,625

Less: Stock-based compensation

(52,040)


(37,190)


(186,759)


(131,041)

Less: Amortization of acquisition-related intangibles

(3,205)


(3,390)


(13,100)


(14,566)

Less: Employer payroll tax on employee stock transactions

(1,960)


(3,198)


(19,628)


(14,190)

Less: Acquisition-related expenses




(186)

Non-GAAP sales and marketing

$ 242,212


$ 178,118


$ 857,040


$ 638,642

GAAP sales and marketing as a percentage of revenue

52%


51%


51%


55%

Non-GAAP sales and marketing as a percentage of revenue

42%


41%


41%


44%









GAAP research and development

$ 110,692


$  80,135


$ 393,362


$ 271,522

Less: Stock-based compensation

(31,712)


(20,328)


(108,523)


(65,890)

Less: Employer payroll tax on employee stock transactions

(1,097)


(2,012)


(10,341)


(7,329)

Non-GAAP research and development

$  77,883


$  57,795


$ 274,498


$ 198,303

GAAP research and development as a percentage of revenue

19%


19%


19%


19%

Non-GAAP research and development as a percentage of revenue

13%


13%


13%


14%









GAAP general and administrative

$  64,443


$  52,184


$ 232,757


$ 192,697

Less: Stock-based compensation

(16,659)


(13,473)


(54,761)


(47,288)

Less: Employer payroll tax on employee stock transactions

(334)


(2,612)


(4,699)


(6,619)

Less: Acquisition-related expenses



(387)


(7,776)

Less: Impairment of operating lease right-of-use assets

(1,207)



(5,099)


Non-GAAP general and administrative

$  46,243


$  36,099


$ 167,811


$ 131,014

GAAP general and administrative as a percentage of revenue

10%


12%


11%


13%

Non-GAAP general and administrative as a percentage of revenue

8%


9%


8%


9%


Reconciliation of income (loss) from operations and operating margin:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

GAAP loss from operations

$ (25,178)


$ (24,897)


$ (61,884)


$ (173,855)

Add: Stock-based compensation

118,007


83,639


408,542


286,877

Add: Amortization of acquisition-related intangibles

5,608


6,586


24,770


25,618

Add: Employer payroll tax on employee stock transactions

4,220


9,276


42,192


34,042

Add: Acquisition-related expenses



387


7,962

Add: Impairment of operating lease right-of-use assets

1,207



5,099


Non-GAAP income from operations

$ 103,864


$  74,604


$ 419,106


$ 180,644

GAAP operating margin

(4)%


(6)%


(3)%


(12)%

Non-GAAP adjustments

22%


23%


23%


24%

Non-GAAP operating margin

18%


17%


20%


12%


Reconciliation of net income (loss) and net income (loss) per share, basic and diluted:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands, except per share data)

2022


2021


2022


2021

GAAP net loss

$   (30,445)


$   (72,412)


$   (69,976)


$  (243,267)

Add: Stock-based compensation

118,007


83,639


408,542


286,877

Add: Amortization of acquisition-related intangibles

5,608


6,586


24,770


25,618

Add: Employer payroll tax on employee stock transactions

4,220


9,276


42,192


34,042

Add: Acquisition-related expenses



387


7,962

Add: Amortization of debt discount and issuance costs

1,250


7,173


5,098


28,001

Add: Loss on extinguishment of debt


33,752



33,752

Add: Tax expense related to intercompany IP transfer(1)


9,294



9,294

Less: Fair value adjustments to strategic investments



(5,270)


Add: Impairment of operating lease right-of-use assets

1,207



5,099


Non-GAAP net income

$     99,847


$     77,308


$   410,842


$   182,279









Numerator:








Non-GAAP net income

$     99,847


$     77,308


$   410,842


$   182,279

Add: Interest expense on convertible senior notes

25


617


37


617

Non-GAAP net income attributable to common stockholders, diluted

$     99,872


$     77,925


$   410,879


$   182,896









Denominator:








Weighted-average common shares outstanding, basic

198,687


188,717


196,675


185,760

Effect of dilutive securities

8,474


19,797


11,322


17,929

Non-GAAP weighted-average common shares outstanding, diluted

207,161


208,514


207,997


203,689









GAAP net loss per share, basic and diluted

$       (0.15)


$       (0.38)


$       (0.36)


$       (1.31)

Non-GAAP net income per share, basic

0.50


0.41


2.09


0.98

Non-GAAP net income per share, diluted

0.48


0.37


1.98


0.90


(1)     Represents net change in tax liabilities related to an intercompany IP transfer


Computation of free cash flow:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

Net cash provided by operating activities

$     87,793


$     62,233


$   506,467


$   296,954

Less: Purchases of property and equipment

(17,470)


(18,251)


(61,396)


(82,395)

Non-GAAP free cash flow

70,323


43,982


445,071


214,559

Net cash (used in) provided by investing activities

(5,224)


(18,835)


(162,909)


81,229

Net cash (used in) provided by financing activities

$   (73,930)


$   143,459


$  (394,621)


$   (58,976)


Computation of billings:


Three Months Ended
January 31,


Year Ended
January 31,

(in thousands)

2022


2021


2022


2021

Revenue

$   580,828


$   430,898


$ 2,107,213


$ 1,453,047

Add: Contract liabilities and refund liability, end of period

1,049,106


800,940


1,049,106


800,940

Less: Contract liabilities and refund liability, beginning of period

(961,243)


(702,691)


(800,940)


(522,201)

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

19,708


26,808


21,021


15,082

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

(18,273)


(21,021)


(18,273)


(21,021)

Add: Contract assets and unbilled accounts receivable contributed by acquisitions




6,589

Less: Contract liabilities and refund liability contributed by acquisitions




(9,344)

Non-GAAP billings

$   670,126


$   534,934


$ 2,358,127


$ 1,723,092

 

SOURCE DocuSign, Inc.

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