SAN FRANCISCO, March 14, 2019 /PRNewswire/ -- DocuSign
(NASDAQ: DOCU), which offers the world's #1 eSignature solution as
part of its broader platform for automating the agreement process,
today announced results for its fourth quarter and fiscal year
ended January 31, 2019.
"Fiscal 2019 was an exciting first fiscal year as a public
company for DocuSign. At 35% growth, we posted over $700 million in revenue for the year and achieved
non-GAAP profitability for our first full year. We added another
23,000 new customers to bring our global base to 477,000. As we
look to fiscal 2020, we are focused on delivering new and
innovative solutions to market across the System of Agreement,
growing our already-strong partner ecosystem, and continuing our
relentless commitment to customer success," said Dan Springer, CEO of DocuSign.
Fourth Quarter Financial Highlights
- Total revenue was $199.7
million, an increase of 34% year-over-year. Subscription
revenue was $187.6 million, an
increase of 37% year-over-year. Professional services and other
revenue was $12.2 million, an
increase of 5% year-over-year.
- Billings were $262.4
million, an increase of 31% year-over-year.
- GAAP gross margin was 74%, compared to 79% in the same
period last year. Non-GAAP gross margin was 78% compared to 80% in
the same period last year.
- GAAP net loss per basic and diluted share was
$0.40 on 167 million shares
outstanding compared to GAAP net loss per share of $0.20 in the fourth quarter of fiscal 2018 on 34
million shares outstanding.
- Non-GAAP net income per diluted share was $0.06 based on 188 million shares outstanding
compared to non-GAAP net income per share of $0.01 in the fourth quarter of fiscal 2018 based
on 42 million shares outstanding.
- Net cash provided by operating activities was
$34.1 million, compared to
$32.0 million in the same period last
year.
- Free cash flow was $22.8
million compared to free cash flow of $28.7 million in the same period last year.
- Cash, cash equivalents, restricted cash and investments
were $933.6 million at the end of the
quarter.
Fiscal 2019 Financial Highlights
- Total revenue was $701.0
million, an increase of 35% year-over-year. Subscription
revenue was $663.7 million, an
increase of 37% year-over-year. Professional services and other
revenue was $37.3 million, an
increase of 10% year-over-year.
- Billings were $801.4
million, an increase of 34% year-over-year.
- GAAP gross margin was 73%, compared to 77% in fiscal
2018. Non-GAAP gross margin was 80% compared to 79% in fiscal
2018.
- GAAP net loss per basic and diluted share was
$3.16 on 135 million shares
outstanding compared to GAAP net loss per share of $1.66 in fiscal 2018 on 32 million shares
outstanding.
- Non-GAAP net income per diluted share was $0.09 based on 159 million shares outstanding
compared to non-GAAP net loss per share of $0.43 in fiscal 2018 based on 32 million shares
outstanding.
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 for Salesforce Essentials. The company
announced the launch of DocuSign for Salesforce Essentials on the
Salesforce AppExchange. Paired with Salesforce Essentials, the
product helps small businesses accelerate the completion of
agreements, ranging from quotes to contracts to sales orders and
more.
- DocuSign for Forests Initiative. The company will commit
$1.5 million this year to support
organizations doing critical work to preserve the world's
forests-and it plans to donate more over time. DocuSign will also
invite new and existing customers to improve their environmental
practices by moving more of their paper-based processes onto
DocuSign. In return, the company will donate 1% of the expanded
revenue to forest-protection causes.
- DocuSign Winter 2019 Product Release. The company
announced several product updates, including a new user experience
for the DocuSign app for Apple iOS devices, enhancements to the 21
CFR Part 11 module for life sciences industries regulated by the
U.S. Food and Drug Administration, and accessibility enhancements
for eSignature sending and signing.
Outlook
The company currently expects the following guidance:
•
|
Quarter ending
April 30, 2019 (in millions, except percentages):
|
|
Total
revenue
|
$205
|
to
|
$210
|
|
Billings
|
$210
|
to
|
$220
|
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
|
Non-GAAP sales and
marketing
|
48%
|
to
|
50%
|
|
Non-GAAP research and
development
|
15%
|
to
|
17%
|
|
Non-GAAP general and
administrative
|
10%
|
to
|
12%
|
|
Interest and other
income (expense)
|
$3
|
to
|
$4
|
|
Provision for income
taxes
|
$2
|
to
|
$2.5
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
185
|
to
|
190
|
|
Capital
expenditures
|
$15
|
to
|
$20
|
•
|
Fiscal year ending
January 31, 2020 (in millions, except percentages):
|
|
Total
revenue
|
$910
|
to
|
$915
|
|
Billings
|
$1,010
|
to
|
$1,030
|
|
Non-GAAP gross
margin
|
78%
|
to
|
80%
|
|
Non-GAAP sales and
marketing
|
48%
|
to
|
50%
|
|
Non-GAAP research and
development
|
15%
|
to
|
17%
|
|
Non-GAAP general and
administrative
|
10%
|
to
|
12%
|
|
Interest and other
income (expense)
|
$12
|
to
|
$16
|
|
Provision for income
taxes
|
$8
|
to
|
$10
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
190
|
to
|
195
|
|
Capital
expenditures
|
$60
|
to
|
$70
|
The company has not reconciled its expectations 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 is not
available without unreasonable effort.
Webcast Conference Call Information
The company will host a conference call on March 14, 2019
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 docusign.com/investors. 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 28, 2019, using the passcode 13687713.
About DocuSign
DocuSign (Nasdaq: DOCU) helps organizations connect and automate
how they prepare, sign, act on, and manage agreements. As part of
its cloud-based System of Agreement Platform, DocuSign offers
eSignature—the world's #1 way to sign electronically on practically
any device, from almost anywhere, at any time. Today, over 475,000
customers and hundreds of millions of users in over 180 countries
use DocuSign to accelerate the process of doing business and
simplify people's lives.
Investor Relations:
Annie
Leschin
VP Investor Relations
investors@docusign.com
Media Relations:
Adrian
Wainwright
Head of Communications
media@docusign.com
Forward-Looking Statements
This press release contains "forward-looking" statements that
are based on our management's beliefs and assumptions and on
information currently available to management. Forward-looking
statements include 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 the
benefits of the acquisition of SpringCM and our ability to develop
our System of Agreement platform, collaborate with partners and
deliver product innovation. They also include statements about our
possible or assumed business strategies, potential growth
opportunities, new products and potential market opportunities.
Forward-looking statements include all statements that are not
historical facts and can be identified by terms such as "believe,"
"could," "potential," "will," "would" or similar expressions and
the negatives of those terms. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. These risks include, but are not limited to, risks and
uncertainties related to: our ability to successfully integrate
SpringCM's operations; our ability to 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, rapid technological change and increased
competition in our market; our ability to compete effectively,
expand our operations and increase adoption of our platform
internationally; our ability to pay off our convertible senior
notes when due; our ability to successfully defend assertions by
third parties that we violate their intellectual property rights;
and our ability to respond to a network or data security incident
that allows unauthorized access to our network or data or our
customers' data. Additional risks and uncertainties that could
affect our financial results are included in the section 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, 2018 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 are presenting 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.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP income (loss) from operations,
non-GAAP operating margin, non-GAAP net income (loss) and non-GAAP
net income (loss) 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 from
our convertible senior notes issued in September 2018, acquisition-related expenses,
partial releases of valuation allowance due to acquisition, 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. Costs associated
with acquisitions include legal, accounting, other professional
fees and other non-recurring costs. 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 flows: We define free cash flow as net
cash provided by (used in) operating activities less purchases
of property and equipment. We believe free cash flow is an
important liquidity measure of the cash (if any) that is available,
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)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
|
187,572
|
|
|
$
|
137,276
|
|
|
$
|
663,657
|
|
|
$
|
484,581
|
|
Professional services
and other
|
12,160
|
|
|
11,598
|
|
|
37,312
|
|
|
33,923
|
|
Total
revenue
|
199,732
|
|
|
148,874
|
|
|
700,969
|
|
|
518,504
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
33,560
|
|
|
22,166
|
|
|
117,764
|
|
|
83,834
|
|
Professional services
and other
|
19,133
|
|
|
9,309
|
|
|
74,657
|
|
|
34,439
|
|
Total cost of
revenue
|
52,693
|
|
|
31,475
|
|
|
192,421
|
|
|
118,273
|
|
Gross
profit
|
147,039
|
|
|
117,399
|
|
|
508,548
|
|
|
400,231
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
127,691
|
|
|
74,630
|
|
|
539,606
|
|
|
277,930
|
|
Research and
development
|
42,921
|
|
|
23,431
|
|
|
185,968
|
|
|
92,428
|
|
General and
administrative
|
39,055
|
|
|
25,603
|
|
|
209,297
|
|
|
81,526
|
|
Total
expenses
|
209,667
|
|
|
123,664
|
|
|
934,871
|
|
|
451,884
|
|
Loss from
operations
|
(62,628)
|
|
|
(6,265)
|
|
|
(426,323)
|
|
|
(51,653)
|
|
Interest
expense
|
(7,101)
|
|
|
(150)
|
|
|
(10,844)
|
|
|
(624)
|
|
Interest income and
other income, net
|
4,794
|
|
|
2,436
|
|
|
8,959
|
|
|
3,135
|
|
Loss before
provision for (benefit from) income taxes
|
(64,935)
|
|
|
(3,979)
|
|
|
(428,208)
|
|
|
(49,142)
|
|
Provision for
(benefit from) income taxes
|
1,309
|
|
|
2,373
|
|
|
(1,750)
|
|
|
3,134
|
|
Net
loss
|
$
|
(66,244)
|
|
|
$
|
(6,352)
|
|
|
$
|
(426,458)
|
|
|
$
|
(52,276)
|
|
Net loss per share
attributable to common stockholders, basic and
diluted
|
$
|
(0.40)
|
|
|
$
|
(0.20)
|
|
|
$
|
(3.16)
|
|
|
$
|
(1.66)
|
|
Weighted-average
number of shares used in computing net loss per share attributable
to common stockholders, basic and diluted
|
167,269
|
|
|
34,339
|
|
|
135,163
|
|
|
32,294
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
|
2,241
|
|
|
$
|
214
|
|
|
$
|
16,182
|
|
|
$
|
911
|
|
Cost of
revenue—professional services
|
3,413
|
|
|
234
|
|
|
25,858
|
|
|
976
|
|
Sales and
marketing
|
20,505
|
|
|
1,839
|
|
|
172,115
|
|
|
9,386
|
|
Research and
development
|
9,562
|
|
|
1,175
|
|
|
74,108
|
|
|
4,896
|
|
General and
administrative
|
13,550
|
|
|
2,772
|
|
|
122,715
|
|
|
13,578
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(in thousands,
except share and per share data)
|
January 31,
2019
|
|
January 31,
2018
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
517,811
|
|
|
$
|
256,867
|
|
Investments
|
251,203
|
|
|
—
|
|
Restricted
cash
|
367
|
|
|
569
|
|
Accounts
receivable
|
174,548
|
|
|
123,750
|
|
Contract
assets—current
|
10,616
|
|
|
14,260
|
|
Prepaid expense and
other current assets
|
29,976
|
|
|
23,349
|
|
Total current
assets
|
984,521
|
|
|
418,795
|
|
Investments—noncurrent
|
164,220
|
|
|
—
|
|
Property and
equipment, net
|
75,832
|
|
|
63,019
|
|
Goodwill
|
195,225
|
|
|
37,306
|
|
Intangible assets,
net
|
74,203
|
|
|
14,148
|
|
Deferred contract
acquisition costs—noncurrent
|
112,583
|
|
|
75,535
|
|
Other
assets—noncurrent
|
8,833
|
|
|
11,170
|
|
Total
assets
|
$
|
1,615,417
|
|
|
$
|
619,973
|
|
Liabilities,
Redeemable Convertible Preferred Stock and Stockholders' Equity
(Deficit)
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
19,590
|
|
|
$
|
23,713
|
|
Accrued
expenses
|
21,755
|
|
|
15,734
|
|
Accrued
compensation
|
77,553
|
|
|
50,852
|
|
Contract
liabilities—current
|
381,060
|
|
|
270,188
|
|
Deferred
rent—current
|
2,452
|
|
|
1,758
|
|
Other
liabilities—current
|
13,903
|
|
|
11,574
|
|
Total current
liabilities
|
516,313
|
|
|
373,819
|
|
Convertible senior
notes, net
|
438,932
|
|
|
—
|
|
Contract
liabilities—noncurrent
|
7,712
|
|
|
7,736
|
|
Deferred
rent—noncurrent
|
24,195
|
|
|
23,044
|
|
Deferred tax
liability—noncurrent
|
4,207
|
|
|
2,511
|
|
Other
liabilities—noncurrent
|
9,696
|
|
|
4,010
|
|
Total
liabilities
|
1,001,055
|
|
|
411,120
|
|
Redeemable
convertible preferred stock
|
—
|
|
|
547,501
|
|
Stockholders' equity
(deficit)
|
|
|
|
Common
stock
|
17
|
|
|
4
|
|
Additional paid-in
capital
|
1,545,088
|
|
|
160,265
|
|
Accumulated other
comprehensive (loss) income
|
(1,965)
|
|
|
3,403
|
|
Accumulated
deficit
|
(928,778)
|
|
|
(502,320)
|
|
Total stockholders'
equity (deficit)
|
614,362
|
|
|
(338,648)
|
|
Total liabilities,
redeemable convertible preferred stock, and stockholders' equity
(deficit)
|
$
|
1,615,417
|
|
|
$
|
619,973
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(66,244)
|
|
|
$
|
(6,352)
|
|
|
$
|
(426,458)
|
|
|
$
|
(52,276)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
12,003
|
|
|
8,047
|
|
|
38,027
|
|
|
31,750
|
|
Amortization of
deferred contract acquisition and fulfillment costs
|
12,223
|
|
|
8,355
|
|
|
42,112
|
|
|
30,377
|
|
Amortization of debt
discount and transaction costs
|
6,360
|
|
|
—
|
|
|
9,507
|
|
|
—
|
|
Stock-based
compensation expense
|
49,271
|
|
|
6,234
|
|
|
410,978
|
|
|
29,747
|
|
Deferred income
taxes
|
2,346
|
|
|
(1,054)
|
|
|
(5,001)
|
|
|
(996)
|
|
Other
|
2,879
|
|
|
(1,856)
|
|
|
800
|
|
|
(1,877)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
(43,937)
|
|
|
(41,039)
|
|
|
(42,571)
|
|
|
(28,077)
|
|
Contract
assets
|
1,430
|
|
|
(4,621)
|
|
|
4,204
|
|
|
(6,934)
|
|
Prepaid expenses and
other current assets
|
(900)
|
|
|
2,621
|
|
|
(3,283)
|
|
|
(1,507)
|
|
Deferred contract
acquisition and fulfillment costs
|
(28,324)
|
|
|
(20,756)
|
|
|
(80,869)
|
|
|
(52,978)
|
|
Other
assets
|
656
|
|
|
(1,271)
|
|
|
2,658
|
|
|
(1,604)
|
|
Accounts
payable
|
(1,390)
|
|
|
8,409
|
|
|
(7,380)
|
|
|
2,864
|
|
Accrued
expenses
|
604
|
|
|
4,774
|
|
|
4,214
|
|
|
5,992
|
|
Accrued
compensation
|
23,868
|
|
|
10,921
|
|
|
26,039
|
|
|
9,168
|
|
Contract
liabilities
|
65,018
|
|
|
57,329
|
|
|
100,874
|
|
|
87,774
|
|
Deferred
rent
|
1,568
|
|
|
6
|
|
|
1,845
|
|
|
(168)
|
|
Other
liabilities
|
(3,294)
|
|
|
2,213
|
|
|
390
|
|
|
3,724
|
|
Net cash provided by
operating activities
|
34,137
|
|
|
31,960
|
|
|
76,086
|
|
|
54,979
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash paid for
acquisition, net of acquired cash
|
—
|
|
|
(299)
|
|
|
(218,779)
|
|
|
(299)
|
|
Purchases of
investments
|
(415,132)
|
|
|
—
|
|
|
(415,132)
|
|
|
—
|
|
Purchases of property
and equipment
|
(11,317)
|
|
|
(3,237)
|
|
|
(30,413)
|
|
|
(18,929)
|
|
Proceeds from sale of
business held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
467
|
|
Net cash used in
investing activities
|
(426,449)
|
|
|
(3,536)
|
|
|
(664,324)
|
|
|
(18,761)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of convertible senior notes, net of initial purchasers'
discounts and transaction costs
|
—
|
|
|
—
|
|
|
560,756
|
|
|
—
|
|
Purchase of capped
calls related to issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
(67,563)
|
|
|
—
|
|
Proceeds from
issuance of common stock in initial public offering, net of
underwriting commissions
|
—
|
|
|
—
|
|
|
529,305
|
|
|
—
|
|
Payment of tax
withholding obligation on RSU settlement
|
(215,332)
|
|
|
—
|
|
|
(215,332)
|
|
|
—
|
|
Proceeds from the
exercise of stock options
|
34,846
|
|
|
4,487
|
|
|
50,211
|
|
|
26,433
|
|
Payment of deferred
offering costs
|
(319)
|
|
|
(315)
|
|
|
(4,011)
|
|
|
(315)
|
|
Payment of holdback
on prior acquisition
|
(250)
|
|
|
—
|
|
|
(250)
|
|
|
(390)
|
|
Net cash provided by
financing activities
|
(181,055)
|
|
|
4,172
|
|
|
853,116
|
|
|
25,728
|
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
(2,955)
|
|
|
2,674
|
|
|
(4,136)
|
|
|
4,246
|
|
Net increase in cash,
cash equivalents and restricted cash
|
(576,322)
|
|
|
35,270
|
|
|
260,742
|
|
|
66,192
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,094,500
|
|
|
222,166
|
|
|
257,436
|
|
|
191,244
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
518,178
|
|
|
$
|
257,436
|
|
|
$
|
518,178
|
|
|
$
|
257,436
|
|
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)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP gross
profit
|
$
|
147,039
|
|
|
$
|
117,399
|
|
|
$
|
508,548
|
|
|
$
|
400,231
|
|
Add: Stock-based
compensation
|
5,654
|
|
|
448
|
|
|
42,040
|
|
|
1,887
|
|
Add: Amortization of
acquisition-related intangibles
|
1,778
|
|
|
1,714
|
|
|
6,081
|
|
|
6,793
|
|
Add: Employer payroll
tax on employee stock transactions
|
1,949
|
|
|
—
|
|
|
1,949
|
|
|
—
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Non-GAAP gross
profit
|
$
|
156,420
|
|
|
$
|
119,561
|
|
|
$
|
558,726
|
|
|
$
|
408,911
|
|
GAAP gross
margin
|
74
|
%
|
|
79
|
%
|
|
73
|
%
|
|
77
|
%
|
Non-GAAP
adjustments
|
4
|
%
|
|
1
|
%
|
|
7
|
%
|
|
2
|
%
|
Non-GAAP gross
margin
|
78
|
%
|
|
80
|
%
|
|
80
|
%
|
|
79
|
%
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$
|
154,012
|
|
|
$
|
115,110
|
|
|
$
|
545,893
|
|
|
$
|
400,747
|
|
Add: Stock-based
compensation
|
2,241
|
|
|
214
|
|
|
16,182
|
|
|
911
|
|
Add: Amortization of
acquisition-related intangibles
|
1,778
|
|
|
1,714
|
|
|
6,081
|
|
|
6,793
|
|
Add: Employer payroll
tax on employee stock transactions
|
830
|
|
|
—
|
|
|
830
|
|
|
—
|
|
Non-GAAP subscription
gross profit
|
$
|
158,861
|
|
|
$
|
117,038
|
|
|
$
|
568,986
|
|
|
$
|
408,451
|
|
GAAP subscription
gross margin
|
82
|
%
|
|
84
|
%
|
|
82
|
%
|
|
83
|
%
|
Non-GAAP
adjustments
|
3
|
%
|
|
1
|
%
|
|
4
|
%
|
|
1
|
%
|
Non-GAAP subscription
gross margin
|
85
|
%
|
|
85
|
%
|
|
86
|
%
|
|
84
|
%
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross profit (loss)
|
$
|
(6,973)
|
|
|
$
|
2,289
|
|
|
$
|
(37,345)
|
|
|
$
|
(516)
|
|
Add: Stock-based
compensation
|
3,413
|
|
|
234
|
|
|
25,858
|
|
|
976
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Add: Employer payroll
tax on employee stock transactions
|
1,119
|
|
|
—
|
|
|
1,119
|
|
|
—
|
|
Non-GAAP professional
services and other gross profit (loss)
|
$
|
(2,441)
|
|
|
$
|
2,523
|
|
|
$
|
(10,260)
|
|
|
$
|
460
|
|
GAAP professional
services and other gross margin
|
(57)
|
%
|
|
20
|
%
|
|
(100)
|
%
|
|
(2)
|
%
|
Non-GAAP
adjustments
|
37
|
%
|
|
2
|
%
|
|
73
|
%
|
|
3
|
%
|
Non-GAAP professional
services and other gross margin
|
(20)
|
%
|
|
22
|
%
|
|
(27)
|
%
|
|
1
|
%
|
Reconciliation of
operating expenses:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP sales and
marketing
|
$
|
127,691
|
|
|
$
|
74,630
|
|
|
$
|
539,606
|
|
|
$
|
277,930
|
|
Less: Stock-based
compensation
|
(20,505)
|
|
|
(1,839)
|
|
|
(172,115)
|
|
|
(9,386)
|
|
Less: Amortization of
acquisition-related intangibles
|
(3,234)
|
|
|
(730)
|
|
|
(7,021)
|
|
|
(3,250)
|
|
Less: Employer
payroll tax on employee stock transactions
|
(8,051)
|
|
|
—
|
|
|
(8,051)
|
|
|
—
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
(68)
|
|
|
—
|
|
Non-GAAP sales and
marketing
|
$
|
95,901
|
|
|
$
|
72,061
|
|
|
$
|
352,351
|
|
|
$
|
265,294
|
|
GAAP sales and
marketing as a percentage of revenue
|
64
|
%
|
|
50
|
%
|
|
77
|
%
|
|
53
|
%
|
Non-GAAP sales and
marketing as a percentage of revenue
|
48
|
%
|
|
48
|
%
|
|
50
|
%
|
|
51
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
|
42,921
|
|
|
$
|
23,431
|
|
|
$
|
185,968
|
|
|
$
|
92,428
|
|
Less: Stock-based
compensation
|
(9,562)
|
|
|
(1,175)
|
|
|
(74,108)
|
|
|
(4,896)
|
|
Less: Employer
payroll tax on employee stock transactions
|
(2,246)
|
|
|
—
|
|
|
(2,246)
|
|
|
—
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
(302)
|
|
|
—
|
|
Non-GAAP research and
development
|
$
|
31,113
|
|
|
$
|
22,256
|
|
|
$
|
109,312
|
|
|
$
|
87,532
|
|
GAAP research and
development as a percentage of revenue
|
21
|
%
|
|
16
|
%
|
|
27
|
%
|
|
18
|
%
|
Non-GAAP research and
development as a percentage of revenue
|
16
|
%
|
|
15
|
%
|
|
16
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
|
39,055
|
|
|
$
|
25,603
|
|
|
$
|
209,297
|
|
|
$
|
81,526
|
|
Less: Stock-based
compensation
|
(13,550)
|
|
|
(2,772)
|
|
|
(122,715)
|
|
|
(13,578)
|
|
Less: Employer
payroll tax on employee stock transactions
|
(3,411)
|
|
|
—
|
|
|
(3,411)
|
|
|
—
|
|
Less:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
(1,290)
|
|
|
—
|
|
Non-GAAP general and
administrative
|
$
|
22,094
|
|
|
$
|
22,831
|
|
|
$
|
81,881
|
|
|
$
|
67,948
|
|
GAAP general and
administrative as a percentage of revenue
|
20
|
%
|
|
17
|
%
|
|
30
|
%
|
|
16
|
%
|
Non-GAAP general and
administrative as a percentage of revenue
|
11
|
%
|
|
15
|
%
|
|
12
|
%
|
|
13
|
%
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP loss from
operations
|
$
|
(62,628)
|
|
|
$
|
(6,265)
|
|
|
$
|
(426,323)
|
|
|
$
|
(51,653)
|
|
Add: Stock-based
compensation
|
49,271
|
|
|
6,234
|
|
|
410,978
|
|
|
29,747
|
|
Add: Amortization of
acquisition-related intangibles
|
5,012
|
|
|
2,444
|
|
|
13,102
|
|
|
10,043
|
|
Add: Employer payroll
tax on employee stock transactions
|
15,657
|
|
|
—
|
|
|
15,657
|
|
|
—
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
1,768
|
|
|
—
|
|
Non-GAAP income
(loss) from operations
|
$
|
7,312
|
|
|
$
|
2,413
|
|
|
$
|
15,182
|
|
|
$
|
(11,863)
|
|
GAAP operating
margin
|
(31)
|
%
|
|
(4)
|
%
|
|
(61)
|
%
|
|
(10)
|
%
|
Non-GAAP
adjustments
|
35
|
%
|
|
6
|
%
|
|
63
|
%
|
|
8
|
%
|
Non-GAAP operating
margin (loss)
|
4
|
%
|
|
2
|
%
|
|
2
|
%
|
|
(2)
|
%
|
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)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net
loss
|
$
|
(66,244)
|
|
|
$
|
(6,352)
|
|
|
$
|
(426,458)
|
|
|
$
|
(52,276)
|
|
Add: Stock-based
compensation
|
49,271
|
|
|
6,234
|
|
|
410,978
|
|
|
29,747
|
|
Add: Amortization of
acquisition-related intangibles
|
5,012
|
|
|
2,444
|
|
|
13,102
|
|
|
10,043
|
|
Add: Employer payroll
tax on employee stock transactions
|
15,657
|
|
|
—
|
|
|
15,657
|
|
|
—
|
|
Add:
Acquisition-related expenses
|
—
|
|
|
—
|
|
|
1,839
|
|
|
—
|
|
Add: Amortization of
debt discount and issuance costs
|
6,360
|
|
|
—
|
|
|
9,507
|
|
|
—
|
|
Less: Tax effect from
the SpringCM acquisition(1)
|
289
|
|
|
—
|
|
|
(7,080)
|
|
|
—
|
|
Non-GAAP net income
(loss)
|
$
|
10,345
|
|
|
$
|
2,326
|
|
|
$
|
17,545
|
|
|
$
|
(12,486)
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
$
|
10,345
|
|
|
$
|
2,326
|
|
|
$
|
17,545
|
|
|
$
|
(12,486)
|
|
Less: preferred stock
accretion
|
—
|
|
|
(364)
|
|
|
(353)
|
|
|
(1,461)
|
|
Less: net income
allocated to participating securities
|
—
|
|
|
(1,462)
|
|
|
(2,636)
|
|
|
—
|
|
Non-GAAP net income
(loss) attributable to common stockholders
|
$
|
10,345
|
|
|
$
|
500
|
|
|
$
|
14,556
|
|
|
$
|
(13,947)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
167,269
|
|
|
34,339
|
|
|
135,163
|
|
|
32,294
|
|
Effect of dilutive
securities
|
20,390
|
|
|
8,087
|
|
|
23,513
|
|
|
—
|
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
187,659
|
|
|
42,426
|
|
|
158,676
|
|
|
32,294
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.40)
|
|
|
$
|
(0.20)
|
|
|
$
|
(3.16)
|
|
|
$
|
(1.66)
|
|
Non-GAAP net income
(loss) per share, basic
|
0.06
|
|
|
0.01
|
|
|
0.11
|
|
|
(0.43)
|
|
Non-GAAP net income
(loss) per share, diluted
|
0.06
|
|
|
0.01
|
|
|
0.09
|
|
|
(0.43)
|
|
|
|
(1)
|
Represents a tax
benefit related to the release of a portion of our deferred tax
asset valuation allowance resulting from the SpringCM
Acquisition.
|
Computation of
free cash flow:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
34,137
|
|
|
$
|
31,960
|
|
|
$
|
76,086
|
|
|
$
|
54,979
|
|
Less: purchase of
property and equipment
|
(11,317)
|
|
|
(3,237)
|
|
|
(30,413)
|
|
|
(18,929)
|
|
Non-GAAP free cash
flow
|
$
|
22,820
|
|
|
$
|
28,723
|
|
|
$
|
45,673
|
|
|
$
|
36,050
|
|
Net cash provided by operating activities for the fourth quarter
of fiscal 2019 includes a payment of $14.4
million of the employer payroll taxes related primarily to
the release of RSUs in connection with our IPO. There were no such
cash outflows in prior periods.
Computation of
billings:
|
|
|
Three Months
Ended
January 31,
|
|
Year Ended January
31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
$
|
199,732
|
|
|
$
|
148,874
|
|
|
$
|
700,969
|
|
|
$
|
518,504
|
|
Add: Contract
liabilities and refund liability, end of period
|
390,887
|
|
|
282,943
|
|
|
390,887
|
|
|
282,943
|
|
Less: Contract
liabilities and refund liability, beginning of period
|
(330,060)
|
|
|
(226,836)
|
|
|
(282,943)
|
|
|
(195,501)
|
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
15,229
|
|
|
12,678
|
|
|
16,899
|
|
|
10,095
|
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(13,436)
|
|
|
(16,899)
|
|
|
(13,436)
|
|
|
(16,899)
|
|
Less: Contract
liabilities and refund liability contributed by the acquisition of
SpringCM
|
—
|
|
|
—
|
|
|
(11,002)
|
|
|
—
|
|
Non-GAAP
billings
|
$
|
262,352
|
|
|
$
|
200,760
|
|
|
$
|
801,374
|
|
|
$
|
599,142
|
|
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SOURCE DocuSign, Inc.