0001261333FALSE00012613332023-12-072023-12-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________

FORM 8-K
______________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 7, 2023
Commission File Number: 001-38465
______________________________________
DOCUSIGN, INC.
(Exact name of registrant as specified in its charter)
______________________________________
Delaware91-2183967
(State or Other Jurisdiction of Incorporation)(I.R.S. Employer Identification Number)
221 Main St.Suite 1550San FranciscoCalifornia94105
(Address of Principal Executive Offices) (Zip Code)

(415) 489-4940
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareDOCUThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02    Results of Operations and Financial Condition.

On December 7, 2023, DocuSign, Inc. (the “Company”) reported financial results for the three and nine months ended October 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The press release is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed incorporated by reference into any registration statement or other filing with the Securities and Exchange Commission (“SEC”) made by the Company, whether made before or after the date of this Current Report, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific references in such filing.


Item 9.01     Financial Statements and Exhibits.

(d) Exhibits:


Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: December 7, 2023
DOCUSIGN, INC.
By:/s/ Blake Grayson
Blake Grayson
Chief Financial Officer
(Principal Accounting and Financial Officer)



DOCUSIGN, INC.
Exhibit 99.1

DocuSign Announces Third Quarter Fiscal 2024 Financial Results

San Francisco – December 7, 2023 – 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 fiscal quarter ended October 31, 2023.

“DocuSign had a solid third quarter, delivering record non-GAAP operating margin and free cash flow,” said Allan Thygesen, CEO of DocuSign. “We are making progress on product innovation, go-to-market effectiveness, and operational efficiency as we build on our considerable scale and trusted market position and expand beyond e-signature into intelligent agreement management.”

Third Quarter Financial Highlights

▪Total revenue was $700.4 million, an increase of 9% year-over-year. Subscription revenue was $682.4 million, an increase of 9% year-over-year. Professional services and other revenue was $18.1 million, a decrease of 16% year-over-year.
▪Billings were $691.8 million, an increase of 5% year-over-year.
▪GAAP gross margin was 80% for both periods. Non-GAAP gross margin was 83% for both periods.
▪GAAP net income per basic share was $0.19 on 204 million shares outstanding compared to a loss of $0.15 on 201 million shares outstanding in the same period last year.
▪GAAP net income per diluted share was $0.19 on 208 million shares outstanding compared to a loss of $0.15 on 201 million shares outstanding in the same period last year.
▪Non-GAAP net income per diluted share was $0.79 on 208 million shares outstanding compared to $0.57 on 206 million shares outstanding in the same period last year.
▪Net cash provided by operating activities was $264.2 million compared to $52.5 million in the same period last year.
▪Free cash flow was $240.3 million compared to $36.1 million in the same period last year.
▪Cash, cash equivalents, restricted cash and investments were $1.7 billion at the end of the quarter.

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:

▪2023 Gartner Magic Quadrant Leader: For the fourth year in a row, DocuSign was named a Leader in the 2023 Magic Quadrant for Contract Life Cycle Manager report by Gartner, Inc. This year, among the 16 vendors evaluated, DocuSign was one of only five leaders and placed highest on the "ability to execute" axis.

▪DocuSign India: DocuSign announced the opening of our engineering center of excellence in India. With the office opening, we’ll be able to recruit top talent and accelerate our ability to deliver critical data-focused product innovation while increasing our global presence.

▪DocuSign 2023 Releases: 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:

◦DocuSign eSignature and Microsoft Power Pages Integration: Easily integrates DocuSign eSignature into Microsoft’s DIY website builder, Power Pages. This integration allows Power Pages makers to give customers a secure way to digitally sign documents without leaving their website—even forms that require multiple steps. Teams in any industry can use this functionality to simplify workflows for common documents that need to be signed (e.g. consent forms, medical agreements, benefits forms, license applications, etc.).

◦Seamlessly Embedded Agreements: An enhancement to Embedded Signing enables users to easily configure the display format so that agreements can seamlessly match the look and feel of websites or
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applications. Users can also configure different signing methods, including click-to-sign, to eliminate friction points and optimize conversion rates to eliminate potential abandonment of agreements.

◦Agreement Reminders: CLM Essentials customers can now manage their contracts more efficiently. By scheduling custom email agreement reminders, users can avoid missing important contract milestones, like contract expiration, renewal, or follow-up deadlines. Users can customize reminders for each recipient group, such as billing reminders for finance or account check-in reminders for sales.

Outlook

The company currently expects the following guidance:

▪Quarter ending January 31, 2024 (in millions, except percentages):
Total revenue$696to$700
Subscription revenue$679to$683
Billings$758to$768
Non-GAAP gross margin81.0%to82.0%
Non-GAAP operating margin22.5%to23.5%
Non-GAAP diluted weighted-average shares outstanding207to212

▪Year ending January 31, 2024 (in millions, except percentages):
Total revenue$2,746to$2,750
Subscription revenue$2,670to$2,674
Billings$2,835to$2,845
Non-GAAP gross margin81.5%to82.5%
Non-GAAP operating margin24.0%to25.0%
Non-GAAP diluted weighted-average shares outstanding207to212

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.

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Webcast Conference Call Information

The company will host a conference call on December 7, 2023 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) December 21, 2023 using the passcode 13742533.

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 1.4 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 2023. 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
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DOCUSIGN, INC.
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, rising and fluctuating 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, our quarterly report on Form 10-Q for the quarter ended October 31, 2023, which we expect to file on December 8, 2023 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
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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 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.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands, except per share data)2023202220232022
Revenue:
Subscription$682,352 $624,055 $1,991,026 $1,798,500 
Professional services and other18,069 21,408 58,470 57,839 
Total revenue700,421 645,463 2,049,496 1,856,339 
Cost of revenue:
Subscription114,227 102,524 339,354 315,614 
Professional services and other28,418 27,018 85,360 83,048 
Total cost of revenue142,645 129,542 424,714 398,662 
Gross profit557,776 515,921 1,624,782 1,457,677 
Operating expenses:
Sales and marketing292,473 313,783 867,916 938,062 
Research and development136,640 115,934 387,964 354,693 
General and administrative108,215 85,553 316,910 224,587 
Restructuring and other related charges710 28,082 30,293 28,082 
Total operating expenses538,038 543,352 1,603,083 1,545,424 
Income (loss) from operations19,738 (27,431)21,699 (87,747)
Interest expense(1,577)(1,456)(5,135)(4,737)
Interest income and other income (expense), net17,673 820 47,373 (2,827)
Income (loss) before provision for (benefit from) income taxes35,834 (28,067)63,937 (95,311)
Provision for (benefit from) income taxes(2,971)1,799 17,198 7,006 
Net income (loss)$38,805 $(29,866)$46,739 $(102,317)
Net income (loss) per share attributable to common stockholders:
Basic$0.19 $(0.15)$0.23 $(0.51)
Diluted$0.19 $(0.15)$0.23 $(0.51)
Weighted-average shares used in computing net income (loss) per share:
Basic204,456 201,393 203,609 200,569 
Diluted208,054 201,393 208,317 200,569 
Stock-based compensation expense included in costs and expenses:
Cost of revenue—subscription$13,705 $11,665 $38,143 $35,272 
Cost of revenue—professional services and other7,343 6,767 21,359 18,327 
Sales and marketing53,715 57,925 150,604 166,574 
Research and development48,310 35,506 129,458 108,689 
General and administrative36,337 23,384 111,271 58,314 
Restructuring and other related charges8 5,590 4,996 5,590 

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DOCUSIGN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)October 31, 2023January 31, 2023
Assets
Current assets
Cash and cash equivalents$1,188,578 $721,895 
Investments—current401,639 309,771 
Accounts receivable, net360,456 516,914 
Contract assets—current19,381 12,437 
Prepaid expenses and other current assets72,629 69,987 
Total current assets2,042,683 1,631,004 
Investments—noncurrent55,448 186,049 
Property and equipment, net230,963 199,892 
Operating lease right-of-use assets126,198 141,493 
Goodwill351,493 353,619 
Intangible assets, net55,605 70,280 
Deferred contract acquisition costs—noncurrent383,205 350,899 
Other assets—noncurrent92,032 79,484 
Total assets$3,337,627 $3,012,720 
Liabilities and Equity
Current liabilities
Accounts payable$14,787 $24,393 
Accrued expenses and other current liabilities99,642 100,987 
Accrued compensation159,381 163,133 
Convertible senior notes—current689,111 722,887 
Contract liabilities—current1,204,599 1,172,867 
Operating lease liabilities—current21,701 24,055 
Total current liabilities2,189,221 2,208,322 
Contract liabilities—noncurrent22,069 16,925 
Operating lease liabilities—noncurrent124,551 141,348 
Deferred tax liability—noncurrent17,160 10,723 
Other liabilities—noncurrent19,593 18,115 
Total liabilities2,372,594 2,395,433 
Stockholders’ equity
Common stock20 20 
Treasury stock(2,164)(1,785)
Additional paid-in capital2,693,124 2,240,732 
Accumulated other comprehensive loss(28,487)(22,996)
Accumulated deficit(1,697,460)(1,598,684)
Total stockholders’ equity
965,033 617,287 
Total liabilities and equity$3,337,627 $3,012,720 

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
Cash flows from operating activities:
Net income (loss)$38,805 $(29,866)$46,739 $(102,317)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization23,324 21,532 71,429 63,976 
Amortization of deferred contract acquisition and fulfillment costs49,399 44,806 147,781 134,381 
Amortization of debt discount and transaction costs1,227 1,243 3,722 3,725 
Non-cash operating lease costs4,768 7,002 16,499 20,468 
Stock-based compensation expense159,418 140,835 455,831 392,765 
Deferred income taxes3,845 (23)7,265 3,045 
Other(571)5,441 (1,353)13,540 
Changes in operating assets and liabilities:
Accounts receivable53,099 (83,084)152,902 18,338 
Prepaid expenses and other current assets6,463 8,435 (7,957)(7,593)
Deferred contract acquisition and fulfillment costs(63,154)(53,305)(176,510)(161,620)
Other assets(5,586)(8,452)(14,019)(15,707)
Accounts payable11,205 2,948 (9,089)(1,739)
Accrued expenses and other liabilities(7,792)(2,094)2,372 873 
Accrued compensation(1,056)(1,808)(4,368)(15,827)
Contract liabilities(3,582)15,010 36,876 56,824 
Operating lease liabilities(5,635)(16,083)(19,292)(33,430)
Net cash provided by operating activities264,177 52,537 708,828 369,702 
Cash flows from investing activities:
Purchases of marketable securities(28,974)(105,956)(203,346)(402,249)
Maturities of marketable securities87,500 121,590 251,517 311,769 
Purchases of strategic and other investments(400)(1,000)(520)(3,625)
Purchases of property and equipment(23,841)(16,477)(70,277)(53,590)
Net cash provided by (used in) investing activities34,285 (1,843)(22,626)(147,695)
Cash flows from financing activities:
Repayments of convertible senior notes(37,083)— (37,083)(16)
Repurchases of common stock(75,035)(38,034)(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(35,615)(23,263)(98,296)(67,120)
Proceeds from exercise of stock options12,375 383 13,207 11,009 
Proceeds from employee stock purchase plan14,604 12,375 32,994 36,526 
Net cash used in financing activities(120,754)(48,539)(211,005)(82,642)
Effect of foreign exchange on cash, cash equivalents and restricted cash(7,187)(6,612)(4,897)(14,652)
Net increase (decrease) in cash, cash equivalents and restricted cash170,521 (4,457)470,300 124,713 
Cash, cash equivalents and restricted cash at beginning of period (1)
1,022,980 638,849 723,201 509,679 
Cash, cash equivalents and restricted cash at end of period (1)
$1,193,501 $634,392 $1,193,501 $634,392 
(1) Cash, cash equivalents and restricted cash included restricted cash of $4.9 million and $1.3 million at October 31, 2023 and January 31, 2023.
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)

Reconciliation of gross profit (loss) and gross margin:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
GAAP gross profit$557,776$515,921$1,624,782$1,457,677
Add: Stock-based compensation21,04818,43259,50253,599
Add: Amortization of acquisition-related intangibles2,0702,4256,7877,232
Add: Employer payroll tax on employee stock transactions5374711,9251,792
Add: Lease-related impairment and lease-related charges—413721678
Non-GAAP gross profit$581,431$537,662$1,693,717$1,520,978
GAAP gross margin80 %80 %79 %79 %
Non-GAAP adjustments3 %3 %4 %3 %
Non-GAAP gross margin83 %83 %83 %82 %
GAAP subscription gross profit$568,125$521,531$1,651,672$1,482,886
Add: Stock-based compensation13,70511,66538,14335,272
Add: Amortization of acquisition-related intangibles2,0702,4256,7877,232
Add: Employer payroll tax on employee stock transactions3013101,2321,150
Add: Lease-related impairment and lease-related charges—127505321
Non-GAAP subscription gross profit$584,201$536,058$1,698,339$1,526,861
GAAP subscription gross margin83 %84 %83 %82 %
Non-GAAP adjustments3 %2 %2 %3 %
Non-GAAP subscription gross margin86 %86 %85 %85 %
GAAP professional services and other gross loss$(10,349)$(5,610)$(26,890)$(25,209)
Add: Stock-based compensation7,3436,76721,35918,327
Add: Employer payroll tax on employee stock transactions236161693642
Add: Lease-related impairment and lease-related charges—286216357
Non-GAAP professional services and other gross profit (loss)$(2,770)$1,604$(4,622)$(5,883)
GAAP professional services and other gross margin(57)%(26)%(46)%(44)%
Non-GAAP adjustments42 %33 %38 %34 %
Non-GAAP professional services and other gross margin(15)%7 %(8)%(10)%

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Reconciliation of operating expenses:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
GAAP sales and marketing$292,473 $313,783 $867,916 $938,062 
Less: Stock-based compensation(53,715)(57,925)(150,604)(166,574)
Less: Amortization of acquisition-related intangibles(2,629)(2,688)(7,888)(8,522)
Less: Employer payroll tax on employee stock transactions(875)(1,277)(3,945)(5,250)
Less: Lease-related impairment and lease-related charges— (1,467)(2,171)(2,353)
Non-GAAP sales and marketing$235,254 $250,426 $703,308 $755,363 
GAAP sales and marketing as a percentage of revenue42 %49 %42 %51 %
Non-GAAP sales and marketing as a percentage of revenue34 %39 %34 %41 %
GAAP research and development$136,640 $115,934 $387,964 $354,693 
Less: Stock-based compensation(48,310)(35,506)(129,458)(108,689)
Less: Employer payroll tax on employee stock transactions(876)(608)(3,671)(3,009)
Less: Lease-related impairment and lease-related charges— (434)(873)(819)
Non-GAAP research and development$87,454 $79,386 $253,962 $242,176 
GAAP research and development as a percentage of revenue20 %18 %19 %19 %
Non-GAAP research and development as a percentage of revenue12 %12 %12 %13 %
GAAP general and administrative$108,215 $85,553 $316,910 $224,587 
Less: Stock-based compensation(36,337)(23,384)(111,271)(58,314)
Less: Employer payroll tax on employee stock transactions(564)(180)(1,541)(926)
Less: Executive transition costs— (830)— (2,634)
Less: Lease-related impairment and lease-related charges— (363)(695)(655)
Non-GAAP general and administrative$71,314 $60,796 $203,403 $162,058 
GAAP general and administrative as a percentage of revenue15 %13 %15 %12 %
Non-GAAP general and administrative as a percentage of revenue10 %9 %10 %9 %
    
Reconciliation of income (loss) from operations and operating margin:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
GAAP income (loss) from operations$19,738 $(27,431)$21,699 $(87,747)
Add: Stock-based compensation159,410 135,247 450,835 387,176 
Add: Amortization of acquisition-related intangibles4,699 5,113 14,675 15,754 
Add: Employer payroll tax on employee stock transactions2,852 2,536 11,082 10,977 
Add: Restructuring and other related charges710 28,082 30,293 28,082 
Add: Executive transition costs— 830 — 2,634 
Add: Lease-related impairment and lease-related charges— 2,677 4,460 4,505 
Non-GAAP income from operations$187,409 $147,054 $533,044 $361,381 
GAAP operating margin3 %(4)%1 %(5)%
Non-GAAP adjustments24 %27 %25 %24 %
Non-GAAP operating margin27 %23 %26 %19 %

10

DOCUSIGN, INC.
Reconciliation of net income (loss) and net income (loss) per share, basic and diluted:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands, except per share data)2023202220232022
GAAP net income (loss)$38,805 $(29,866)$46,739 $(102,317)
Add: Stock-based compensation159,410 135,247 450,835 387,176 
Add: Amortization of acquisition-related intangibles4,699 5,113 14,675 15,754 
Add: Employer payroll tax on employee stock transactions2,852 2,536 11,082 10,977 
Add: Amortization of debt discount and issuance costs1,250 1,197 4,149 3,679 
Add: Fair value adjustments to strategic investments— 45 119 (384)
Add: Restructuring and other related charges710 28,082 30,293 28,082 
Add: Executive transition costs— 830 — 2,634 
Add: Lease-related impairment and lease-related charges— 2,677 4,460 4,505 
Add: Income tax effect of non-GAAP adjustments(43,922)(27,733)(98,712)(64,416)
Non-GAAP net income$163,804 $118,128 $463,640 $285,690 
Numerator:
Non-GAAP net income$163,804 $118,128 $463,640 $285,690 
Add: Interest expense on convertible senior notes22 46 425 75 
Non-GAAP net income attributable to common stockholders, diluted$163,826 $118,174 $464,065 $285,765 
Denominator:
Weighted-average common shares outstanding, basic204,456 201,393 203,609 200,569 
Effect of dilutive securities3,598 4,255 4,708 5,721 
Non-GAAP weighted-average common shares outstanding, diluted208,054 205,648 208,317 206,290 
GAAP net income (loss) per share, basic$0.19 $(0.15)$0.23 $(0.51)
GAAP net income (loss) per share, diluted$0.19 $(0.15)$0.23 $(0.51)
Non-GAAP net income per share, basic0.80 0.59 $2.28 $1.42 
Non-GAAP net income per share, diluted0.79 0.57 $2.23 $1.39 

Computation of free cash flow:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
Net cash provided by operating activities$264,177 $52,537 $708,828 $369,702 
Less: Purchases of property and equipment(23,841)(16,477)(70,277)(53,590)
Non-GAAP free cash flow$240,336 $36,060 $638,551 $316,112 
Net cash provided by (used in) investing activities$34,285 $(1,843)$(22,626)$(147,695)
Net cash used in financing activities$(120,754)$(48,539)$(211,005)$(82,642)

11

DOCUSIGN, INC.
Computation of billings:
Three Months Ended October 31,Nine Months Ended October 31,
(in thousands)2023202220232022
Revenue$700,421 $645,463 $2,049,496 $1,856,339 
Add: Contract liabilities and refund liability, end of period1,228,174 1,113,131 1,228,174 1,113,131 
Less: Contract liabilities and refund liability, beginning of period(1,233,894)(1,094,939)(1,191,269)(1,049,106)
Add: Contract assets and unbilled accounts receivable, beginning of period22,358 13,695 16,615 18,273 
Less: Contract assets and unbilled accounts receivable, end of period(25,253)(17,945)(25,253)(17,945)
Non-GAAP billings$691,806 $659,405 $2,077,763 $1,920,692 

12
v3.23.3
Cover
Dec. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Dec. 07, 2023
Entity Registrant Name DOCUSIGN, INC.
Entity Central Index Key 0001261333
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-38465
Entity Tax Identification Number 91-2183967
Entity Address, Address Line One 221 Main St.
Entity Address, Address Line Two Suite 1550
Entity Address, City or Town San Francisco
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94105
City Area Code 415
Local Phone Number 489-4940
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.0001 per share
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Trading Symbol DOCU
DocuSign (NASDAQ:DOCU)
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