DocuSign Announces Fourth Quarter and Fiscal Year 2024 Financial Results
SAN FRANCISCO, March 7, 2024 /PRNewswire/ -- DocuSign, Inc. (NASDAQ: DOCU), which offers the world's #1 e-signature product as part of its industry leading lineup, today announced results for its fourth quarter and fiscal year ended January 31, 2024.
"DocuSign ended Fiscal 2024 with momentum in product innovation, customer growth, and financial performance, including more than doubling free cash flow year-over-year," said Allan Thygesen, CEO of DocuSign. "The agreement management opportunity is massive, and we're excited to deliver category-defining innovation to our 1.5 million customers in Fiscal 2025 and beyond."
Fourth Quarter Financial Highlights
-- Total revenue was $712.4 million, an increase of 8% year-over-year.
Subscription revenue was $695.7 million, an increase of 8%
year-over-year. Professional services and other revenue was $16.7
million, an increase of 5% year-over-year.
-- Billings were $833.1 million, an increase of 13% year-over-year.
-- GAAP gross margin was 79% for both periods. Non-GAAP gross margin was
82% compared to 83% in the same period last year.
-- GAAP net income per basic share was $0.13 on 206 million shares
outstanding compared to $0.02 on 202 million shares outstanding in the
same period last year.
-- GAAP net income per diluted share was $0.13 on 210 million shares
outstanding compared to $0.02 on 206 million shares outstanding in the
same period last year.
-- Non-GAAP net income per diluted share was $0.76 on 210 million shares
outstanding compared to $0.65 on 206 million shares outstanding in the
same period last year.
-- Net cash provided by operating activities was $270.7 million compared to
$137.1 million in the same period last year.
-- Free cash flow was $248.6 million compared to $113.0 million in the same
period last year.
-- Cash, cash equivalents, restricted cash and investments were $1.2
billion at the end of the quarter. During the quarter, the company
repaid $689.9 million principal amount of our 2024 convertible senior
notes.
Fiscal 2024 Financial Highlights
-- Total revenue was $2.8 billion, an increase of 10% over the prior year.
Subscription revenue was $2.7 billion, an increase of 10% over the prior
year. Professional services and other revenue was $75.2 million, an
increase of 2% year-over-year.
-- Billings were $2.9 billion, an increase of 9% over the prior year.
-- GAAP gross margin was 79% for both years. Non-GAAP gross margin was 83%
compared to 82% in the prior year.
-- GAAP net income per basic share was $0.36 on 204 million shares
outstanding compared to a loss of $0.49 on 201 million shares
outstanding in fiscal 2023.
-- GAAP net income per diluted share was $0.36 on 209 million shares
outstanding compared to a loss of $0.49 on 201 million shares
outstanding in fiscal 2023.
-- Non-GAAP net income per diluted share was $2.98 on 209 million shares
outstanding compared to $2.03 on 206 million shares outstanding in
fiscal 2023.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Other Key Metrics."
Operational and Other Financial Highlights
-- DocuSign Achieves StateRAMP Authorization: State, local and education
customers can now use DocuSign solutions like Contract Lifecycle
Management (CLM) and eSignature (DocuSign Federal) in the
StateRAMP-authorized environment. Customers will be able to reclaim the
time spent on paper-intensive, manual processes and improve constituent
experiences while increasing information security.
-- DocuSign 2023 Release 4: DocuSign announced new product capabilities for
generating agreements, creating better signing experiences and managing
end-to-end agreements. Highlights of our recent product release include:
-- Identity Wallet for Qualified Electronic Signatures (QES): Further
simplifies the QES agreement process for repeat signers by pairing
their Identity Wallet with their mobile or desktop passkey and
leveraging built-in biometric including FaceID and fingerprint
scans. Signers enjoy a streamlined identification process, and
organizations achieve faster completions for their most important
documents.
-- Modernized DocuSign CLM search experience: We've made it easier for
users to access agreements and leverage AI across their contracts.
Our new modern search experience makes agreements more discoverable
and actionable, allowing users to save customized searches most
relevant to their role, filter for specific contract attributes, and
execute bulk actions such as downloading or exporting agreements
right from the results page.
Outlook
The company currently expects the following guidance:
? Quarter ending April 30, 2024 (in millions, except percentages):
Total revenue $704 to $708
Subscription revenue $686 to $690
Billings $685 to $695
Non-GAAP gross margin 81.0 % to 82.0 %
Non-GAAP operating margin 27.0 % to 28.0 %
Non-GAAP diluted weighted-average shares outstanding 208 to 213
? Fiscal year ending January 31, 2025 (in millions, except percentages):
Total revenue $2,915 to $2,927
Subscription revenue $2,843 to $2,855
Billings $2,970 to $3,024
Non-GAAP gross margin 81.0 % to 82.0 %
Non-GAAP operating margin 26.5 % to 28.0 %
Non-GAAP diluted weighted-average shares outstanding 208 to 213
A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by many factors, including the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release.
Webcast Conference Call Information
The company will host a conference call on March 7, 2024 at 2:00 p.m. PT (5:00 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) March 21, 2024, using the passcode 13743590.
About DocuSign
DocuSign redefines how the world comes together and agrees, making agreements smarter, easier and more trusted. As part of its industry leading product lineup, DocuSign offers eSignature, the world's #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, over 1.5 million customers and more than a billion users in over 180 countries use DocuSign products and solutions to accelerate the process of doing business and simplify people's lives. For more information, visit http://www.docusign.com.
Copyright 2024. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).
Investor Relations:
DocuSign Investor Relations
investors@docusign.com
Media Relations:
DocuSign Corporate Communications
media@docusign.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, objectives for future operations, and the impact of such assumptions on our financial condition and results of operations are forward-looking statements. Forward-looking statements in this press release also include, among other things, statements under "Outlook" above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as our anticipated future products and product strategy, as well as statements related to our expectations regarding customer acceptance of those products. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.
Forward-looking statements contained in this press release include, but are not limited to, statements about: our expectations regarding global macro-economic conditions, including the effects of inflation, volatile interest rates, instability in the global banking sector, and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market; our ability to compete effectively in an evolving and competitive market; the impact of any data breaches, cyberattacks or other malicious activity on our technology systems; our ability to effectively sustain and manage our growth and future expenses and achieve and maintain future profitability; our ability to attract new customers and maintain and expand our existing customer base; our ability to effectively implement and execute our restructuring plans; our ability to scale and update our platform to respond to customers' needs and rapid technological change, including our ability to successfully incorporate generative artificial intelligence into our existing and future products; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to retain our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions and to successfully integrate and realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility or other indebtedness; our ability to realize the anticipated benefits of our stock repurchase program; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel, including executive level management; our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts; our ability to successfully implement and maintain new and existing information technology systems, including our ERP system; and our ability to maintain proper and effective internal controls.
Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended January 31, 2023 filed on March 27, 2023 with the Securities and Exchange Commission (the "SEC"), quarterly report on Form 10-Q for the quarter ended October 31, 2023 filed on December 8, 2023 with the SEC, and other filings that we make from time to time with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this press release or to conform such statements to actual results or revised expectations, except as required by law.
Non-GAAP Financial Measures and Other Key Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We present these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, these non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges, as these costs are not reflective of ongoing operations and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023 and fiscal 2024, we have determined the projected non-GAAP tax rate to be 20%.
Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.
Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings can be used to measure our periodic performance, when taking into consideration the timing aspects of customer renewals, which represents a large component of our business. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.
For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Year Ended
January 31, 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, January 31,
2024 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 Year Ended
January 31, 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 Year Ended
January 31, 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 Year Ended
January 31, 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 Year Ended
January 31, 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 Year Ended
January 31, 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 Year Ended
January 31, 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 Year Ended
January 31, 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.
