DOCU
$218.12
Docusign
($9.68)
(4.25%)
Earnings Details
2nd Quarter July 2020
Thursday, September 03, 2020 4:05:00 PM
Tweet Share Watch
Summary

Docusign Misses

Docusign (DOCU) reported 2nd Quarter July 2020 earnings of $0.06 per share on revenue of $342.2 million. The consensus earnings estimate was $0.08 per share on revenue of $318.4 million. The Earnings Whisper number was $0.10 per share. Revenue grew 45.2% on a year-over-year basis.

The company said it expects third quarter revenue of $358.0 million to $362.0 million. The current consensus revenue estimate is $333.8 million for the quarter ending October 31, 2020. The company also said it expects fiscal year revenue of $1.384 billion to $1.388 billion. The company's previous guidance was revenue of $1.313 billion to $1.317 billion and the current consensus estimate is revenue of $1.32 billion for the year ending January 31, 2021.

Results
Reported Earnings
$0.06
Earnings Whisper
$0.10
Consensus Estimate
$0.08
Reported Revenue
$342.2 Mil
Revenue Estimate
$318.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

DocuSign Announces Second Quarter Fiscal 2021 Financial Results

SAN FRANCISCO, Sept. 3, 2020 /PRNewswire/ -- DocuSign, Inc. (NASDAQ: DOCU), which offers the world's #1 eSignature solution as part of the DocuSign Agreement Cloud, today announced results for its fiscal quarter ended July 31, 2020.

"In an accelerating digital world where business can be conducted from anywhere, the need to agree electronically and remotely has never been stronger, as shown in our 61% year-over-year billings growth," said Dan Springer, CEO of DocuSign. "We are just scratching the surface of our Agreement Cloud opportunity and believe we are increasingly becoming an essential cloud-software platform for organizations of all sizes."

Second Quarter Financial Highlights

  • Total revenue was $342.2 million, an increase of 45% year-over-year. Subscription revenue was $323.6 million, an increase of 47% year-over-year. Professional services and other revenue was $18.6 million, an increase of 25% year-over-year.
  • Billings were $405.7 million, an increase of 61% year-over-year.
  • GAAP gross margin was 74% in both comparative periods. Non-GAAP gross margin was 78% in both comparative periods.
  • GAAP net loss per basic and diluted share was $0.35 on 185 million shares outstanding compared to $0.39 on 175 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.17 on 203 million shares outstanding compared to $0.01 on 189 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $118.1 million compared to $26.4 million in the same period last year.
  • Free cash flow was $99.8 million compared to $11.9 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $740.6 million 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

  • DocuSign Agreement Cloud 2020 Product Release 2. DocuSign introduced several new features and enhancements in the latest release to support customers in their digital transformations: DocuSign eSignature for Workplace from Facebook, which allows access to DocuSign eSignature via a chatbot within Facebook from Work; Workflow Templates for DocuSign CLM, which allows business users to quickly configure common contract processes such as approvals, signature, and routing; and enhancements to DocuSign ID Verification and DocuSign Click.
  • Liveoak Technologies Acquisition. On July 7, 2020, DocuSign announced its acquisition of Liveoak Technologies, Inc. in an all-stock transaction. For agreements that would normally require people to be physically present together, Liveoak enables the transaction to be done remotely via videoconferencing. The company's platform includes several other technologies specific to remote agreements, such as video identity verification, collaborative form-filling, an integration with DocuSign eSignature, and a detailed audit trail. DocuSign plans to leverage Liveoak's technology and expertise to accelerate the launch of DocuSign Notary, a new product for remote online notarization, where signers and the notary public are in different places. The beta release of DocuSign Notary is currently slated for November 2020.
  • CTO appointment. On August 25, 2020, DocuSign announced Kamal Hathi as its new chief technology officer (CTO). Prior to joining DocuSign, Kamal was chief product and technology officer at Trader Interactive, a leading provider of online marketplaces and products serving the lifestyle vehicles and commercial equipment sector. Before that he spent more than two decades at Microsoft, most recently as GM for its SaaS analytics and business intelligence solution, Power BI. As CTO, Kamal will oversee the development and execution of DocuSign's technology roadmap, including the expansion of the DocuSign Agreement Cloud.

Outlook

The company currently expects the following guidance:

?          Quarter ending October 31, 2020 (in millions, except percentages):


Total revenue

$358

to

$362

Subscription revenue

$343

to

$347

Billings

$380

to

$390

Non-GAAP gross margin

78%

to

80%

Non-GAAP sales and marketing

46%

to

48%

Non-GAAP research and development

14%

to

16%

Non-GAAP general and administrative

9%

to

11%

Non-GAAP interest and other income (expense)

$(1)

to

$1

Provision for income taxes

$2

to

$3

Non-GAAP diluted weighted-average shares outstanding

200

to

205


?          Year ending January 31, 2021 (in millions, except percentages):


Total revenue

$1,384

to

$1,388

Subscription revenue

$1,315

to

$1,319

Billings

$1,623

to

$1,643

Non-GAAP gross margin

78%

to

80%

Non-GAAP sales and marketing

45%

to

47%

Non-GAAP research and development

14%

to

16%

Non-GAAP general and administrative

9%

to

11%

Non-GAAP interest and other income

$4

to

$6

Provision for income taxes

$7

to

$9

Non-GAAP diluted weighted-average shares outstanding

200

to

205

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 September 3, 2020 at 1:30 p.m. PT (4:30 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) September 17, 2020 using the passcode 13708111.

About DocuSign

DocuSign helps organizations connect and automate how they prepare, sign, act on, and manage agreements. As part of the DocuSign Agreement Cloud, DocuSign offers eSignature, the world's #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, nearly 750,000 customers and hundreds of millions of users in over 180 countries use DocuSign to accelerate the process of doing business and to simplify people's lives.

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

Copyright 2020. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

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 all statements that are not historical facts and can be identified by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, among other things, statements under "Outlook" above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as customer growth, as well as statements related to our expectations regarding the benefits of the DocuSign Agreement Cloud and enhancements to it, additions to the Agreement Cloud suite of products, and the anticipated benefits of the acquisition and integration of Seal Software and Liveoak Technologies. They also include statements about our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations. These statements are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

These risks include, among other things, risks related to the impact of the COVID-19 pandemic on our business, financial condition and results of operations as well as the businesses of our customers and partners and the economy as a whole; our ability to estimate the size of our total addressable market; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers and maintain and expand our existing customer base; our ability to scale and update our platform to respond to customers' needs and rapid technological change; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationship with developers; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for, execute on, integrate the operations of and realize the anticipated benefits of potential acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash and cash equivalents to satisfy our liquidity needs; 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; 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, 2020 filed on March 27, 2020, our quarterly report on Form 10-Q for the quarter ended April 30, 2020 filed on June 5, 2020, and other filings that we make from time to time with the with the Securities and Exchange Commission (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 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 from our convertible senior notes issued in September 2018, acquisition-related expenses, 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 that do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods.

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

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

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

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands, except per share data)

2020


2019


2020


2019

Revenue:








Subscription

$

323,643



$

220,811



$

604,565



$

422,269


Professional services and other

18,566



14,801



34,661



27,305


Total revenue

342,209



235,612



639,226



449,574


Cost of revenue:








Subscription

64,730



39,472



116,740



72,591


Professional services and other

25,885



21,704



47,907



40,604


Total cost of revenue

90,615



61,176



164,647



113,195


Gross profit

251,594



174,436



474,579



336,379


Operating expenses:








Sales and marketing

194,992



150,886



366,785



280,822


Research and development

63,791



47,517



118,025



84,700


General and administrative

51,446



40,755



90,257



78,016


Total operating expenses

310,229



239,158



575,067



443,538


Loss from operations

(58,635)



(64,722)



(100,488)



(107,159)


Interest expense

(7,684)



(7,273)



(15,244)



(14,429)


Interest income and other income, net

2,601



4,531



6,343



9,748


Loss before provision for income taxes

(63,718)



(67,464)



(109,389)



(111,840)


Provision for income taxes

842



1,168



2,975



2,514


Net loss

$

(64,560)



$

(68,632)



$

(112,364)



$

(114,354)


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

$

(0.35)



$

(0.39)



$

(0.61)



$

(0.66)


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

184,862



175,389



183,930



173,773










Stock-based compensation expense included in costs and
expenses:








Cost of revenue—subscription

$

5,014



$

3,115



$

8,878



$

5,397


Cost of revenue—professional services and other

5,225



4,821



9,350



8,261


Sales and marketing

32,305



25,942



56,970



44,044


Research and development

14,781



11,963



26,666



19,280


General and administrative

11,442



9,951



20,454



21,081


 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands)

July 31, 2020


January 31, 2020

Assets




Current assets




Cash and cash equivalents

$

404,262



$

241,203


Investments—current

269,777



414,939


Restricted cash

280



280


Accounts receivable

224,502



237,841


Contract assets—current

17,044



12,502


Prepaid expenses and other current assets

52,158



37,125


Total current assets

968,023



943,890


Investments—noncurrent

66,265



239,729


Property and equipment, net

150,646



128,293


Operating lease right-of-use assets

168,313



149,833


Goodwill

349,254



194,882


Intangible assets, net

135,825



56,500


Deferred contract acquisition costs—noncurrent

198,325



153,333


Other assets—noncurrent

16,659



24,678


Total assets

$

2,053,310



$

1,891,138


Liabilities and Stockholders' Equity




Current liabilities




Accounts payable

$

33,053



$

28,144


Accrued expenses and other current liabilities

54,916



54,344


Accrued compensation

111,623



83,189


Contract liabilities—current

624,031



507,560


Operating lease liabilities—current

30,415



20,728


Total current liabilities

854,038



693,965


Convertible senior notes, net

479,105



465,321


Contract liabilities—noncurrent

11,837



11,478


Operating lease liabilities—noncurrent

177,862



162,432


Deferred tax liability—noncurrent

8,740



4,920


Other liabilities—noncurrent

19,837



6,695


Total liabilities

1,551,419



1,344,811


Stockholders' equity




Common stock

19



18


Additional paid-in capital

1,749,323



1,685,167


Accumulated other comprehensive income (loss)

2,098



(1,673)


Accumulated deficit

(1,249,549)



(1,137,185)


Total stockholders' equity

501,891



546,327


Total liabilities and stockholders' equity

$

2,053,310



$

1,891,138


 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2020


2019


2020


2019

Cash flows from operating activities:








Net loss

$

(64,560)



$

(68,632)



$

(112,364)



$

(114,354)


Adjustments to reconcile net  to net cash used in operating activities








Depreciation and amortization

17,937



12,290



31,976



24,261


Amortization of deferred contract acquisition and fulfillment costs

23,834



16,889



45,194



31,149


Amortization of debt discount and transaction costs

6,942



6,548



13,784



13,002


Non-cash operating lease costs

6,795



4,735



13,119



8,863


Stock-based compensation expense

68,767



55,792



122,318



98,063


Deferred income taxes

(180)



(24)



(284)



28


Other

(997)



(1,260)



(493)



(2,371)


Changes in operating assets and liabilities








Accounts receivable

7,915



(21,518)



25,154



35,896


Contract assets

2,310



(2,204)



1,570



(4,905)


Prepaid expenses and other current assets

4,272



3,950



(5,388)



(3,157)


Deferred contract acquisition and fulfillment costs

(51,377)



(27,952)



(92,414)



(48,439)


Other assets

(4,768)



418



(6,132)



959


Accounts payable

8,829



1,306



6,275



1,588


Accrued expenses and other liabilities

12,626



9,792



11,710



14,502


Accrued compensation

24,401



22,296



22,865



2,427


Contract liabilities

62,892



17,472



107,486



21,746


Operating lease liabilities

(7,504)



(3,493)



(7,098)



(7,198)


Net cash provided by operating activities

118,134



26,405



177,278



72,060


Cash flows from investing activities:








Cash paid for acquisition, net of acquired cash

(180,370)





(180,370)




Purchases of marketable securities

(11,667)



(155,675)



(11,667)



(530,886)


Sales of marketable securities





28,986




Maturities of marketable securities

131,345



151,992



301,416



244,449


Purchases of strategic investments







(15,500)


Purchases of other investments

(241)





(3,241)




Purchases of property and equipment

(18,362)



(14,554)



(44,751)



(29,791)


Net cash provided by (used in) investing activities

(79,295)



(18,237)



90,373



(331,728)


Cash flows from financing activities:








Payment of tax withholding obligation on RSU settlement

(87,137)



(29,841)



(133,860)



(85,978)


Proceeds from exercise of stock options

5,403



10,194



13,038



42,448


Proceeds from employee stock purchase plan





13,590



10,563


Net cash used in financing activities

(81,734)



(19,647)



(107,232)



(32,967)


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

4,920



(741)



2,640



(1,120)


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

(37,975)



(12,220)



163,059



(293,755)


Cash, cash equivalents and restricted cash at beginning of period

442,517



236,643



241,483



518,178


Cash, cash equivalents and restricted cash at end of period

$

404,542



$

224,423



$

404,542



$

224,423


 

DOCUSIGN, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)


Reconciliation of gross profit and gross margin:



Three Months Ended July
31,


Six Months Ended July
31,

(in thousands)

2020


2019


2020


2019

GAAP gross profit

$

251,594



$

174,436



$

474,579



$

336,379


Add: Stock-based compensation

10,239



7,936



18,228



13,658


Add: Amortization of acquisition-related intangibles

3,132



1,381



4,480



3,008


Add: Employer payroll tax on employee stock transactions

1,738



541



2,774



1,193


Non-GAAP gross profit

$

266,703



$

184,294



$

500,061



$

354,238


GAAP gross margin

74

%


74

%


74

%


75

%

Non-GAAP adjustments

4

%


4

%


4

%


4

%

Non-GAAP gross margin

78

%


78

%


78

%


79

%









GAAP subscription gross profit

$

258,913



$

181,339



$

487,825



$

349,678


Add: Stock-based compensation

5,014



3,115



8,878



5,397


Add: Amortization of acquisition-related intangibles

3,132



1,381



4,480



3,008


Add: Employer payroll tax on employee stock transactions

926



211



1,461



432


Non-GAAP subscription gross profit

$

267,985



$

186,046



$

502,644



$

358,515


GAAP subscription gross margin

80

%


82

%


81

%


83

%

Non-GAAP adjustments

3

%


2

%


2

%


2

%

Non-GAAP subscription gross margin

83

%


84

%


83

%


85

%









GAAP professional services and other gross loss

$

(7,319)



$

(6,903)



$

(13,246)



$

(13,299)


Add: Stock-based compensation

5,225



4,821



9,350



8,261


Add: Employer payroll tax on employee stock transactions

812



330



1,313



761


Non-GAAP professional services and other gross loss

$

(1,282)



$

(1,752)



$

(2,583)



$

(4,277)


GAAP professional services and other gross margin

(39)

%


(47)

%


(38)

%


(49)

%

Non-GAAP adjustments

32

%


35

%


31

%


33

%

Non-GAAP professional services and other gross margin

(7)

%


(12)

%


(7)

%


(16)

%

 

Reconciliation of operating expenses:



Three Months Ended July
31,


Six Months Ended July
31,

(in thousands)

2020


2019


2020


2019

GAAP sales and marketing

$

194,992



$

150,886



$

366,785



$

280,822


Less: Stock-based compensation

(32,305)



(25,942)



(56,970)



(44,044)


Less: Amortization of acquisition-related intangibles

(4,284)



(3,039)



(7,195)



(6,145)


Less: Acquisition-related expenses

(186)





(186)




Less: Employer payroll tax on employee stock transactions

(3,958)



(1,577)



(6,867)



(3,928)


Non-GAAP sales and marketing

$

154,259



$

120,328



$

295,567



$

226,705


GAAP sales and marketing as a percentage of revenue

57

%


64

%


57

%


62

%

Non-GAAP sales and marketing as a percentage of revenue

45

%


51

%


46

%


50

%









GAAP research and development

$

63,791



$

47,517



$

118,025



$

84,700


Less: Stock-based compensation

(14,781)



(11,963)



(26,666)



(19,280)


Less: Employer payroll tax on employee stock transactions

(2,019)



(1,026)



(3,565)



(2,176)


Non-GAAP research and development

$

46,991



$

34,528



$

87,794



$

63,244


GAAP research and development as a percentage of revenue

19

%


20

%


18

%


19

%

Non-GAAP research and development as a percentage of
revenue

14

%


15

%


14

%


14

%









GAAP general and administrative

$

51,446



$

40,755



$

90,257



$

78,016


Less: Stock-based compensation

(11,442)



(9,951)



(20,454)



(21,081)


Less: Acquisition-related expenses

(6,746)





(7,440)




Less: Employer payroll tax on employee stock transactions

(1,544)



(720)



(2,601)



(2,322)


Non-GAAP general and administrative

$

31,714



$

30,084



$

59,762



$

54,613


GAAP general and administrative as a percentage of revenue

15

%


17

%


15

%


18

%

Non-GAAP general and administrative as a percentage of
revenue

9

%


13

%


9

%


12

%

 

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



Three Months Ended July
31,


Six Months Ended July
31,

(in thousands)

2020


2019


2020


2019

GAAP loss from operations

$

(58,635)



$

(64,722)



$

(100,488)



$

(107,159)


Add: Stock-based compensation

68,767



55,792



122,318



98,063


Add: Amortization of acquisition-related intangibles

7,416



4,420



11,675



9,153


Add: Acquisition-related expenses

6,932





7,626




Add: Employer payroll tax on employee stock transactions

9,259



3,864



15,807



9,619


Non-GAAP income from operations

$

33,739



$

(646)



$

56,938



$

9,676


GAAP operating margin

(17)

%


(27)

%


(16)

%


(24)

%

Non-GAAP adjustments

27

%


27

%


25

%


26

%

Non-GAAP operating margin

10

%


%


9

%


2

%

 

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



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands, except per share data)

2020


2019


2020


2019

GAAP net loss

$

(64,560)



$

(68,632)



$

(112,364)



$

(114,354)


Add: Stock-based compensation

68,767



55,792



122,318



98,063


Add: Amortization of acquisition-related intangibles

7,416



4,420



11,675



9,153


Add: Acquisition-related expenses

6,932





7,626




Add: Employer payroll tax on employee stock transactions

9,259



3,864



15,807



9,619


Add: Amortization of debt discount and issuance costs

6,942



6,548



13,784



13,002


Non-GAAP net income

$

34,756



$

1,992



$

58,846



$

15,483










Numerator:








Non-GAAP net income

$

34,756



$

1,992



$

58,846



$

15,483










Denominator:








Weighted-average common shares outstanding, basic

184,862



175,389



183,930



173,773


Effect of dilutive securities

18,547



13,952



16,247



15,516


Non-GAAP weighted-average common shares outstanding,
diluted

203,409



189,341



200,177



189,289










GAAP net loss per share, basic and diluted

$

(0.35)



$

(0.39)



$

(0.61)



$

(0.66)


Non-GAAP net income per share, basic

0.19



0.01



0.32



0.09


Non-GAAP net income per share, diluted

0.17



0.01



0.29



0.08


 

Computation of free cash flow:



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2020


2019


2020


2019

Net cash provided by operating activities

$

118,134



$

26,405



$

177,278



$

72,060


Less: Purchases of property and equipment

(18,362)



(14,554)



(44,751)



(29,791)


Non-GAAP free cash flow

$

99,772



$

11,851



$

132,527



$

42,269


Net cash provided by (used in) investing activities

$

(79,295)



$

(18,237)



$

90,373



$

(331,728)


Net cash used in financing activities

$

(81,734)



$

(19,647)



$

(107,232)



$

(32,967)


 

Computation of billings:



Three Months Ended
July 31,


Six Months Ended
July 31,

(in thousands)

2020


2019


2020


2019

Revenue

$

342,209



$

235,612



$

639,226



$

449,574


Add: Contract liabilities and refund liability, end of period

638,790



412,953



638,790



412,953


Less: Contract liabilities and refund liability, beginning of
period

(568,544)



(395,254)



(522,201)



(390,887)


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

16,390



16,810



15,082



13,436


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

(20,395)



(17,757)



(20,395)



(17,757)


Add: Contract assets and unbilled accounts receivable by
acquisitions

6,589





6,589




Less: Contract liabilities and refund liability contributed by
acquisitions

(9,344)





(9,344)




Non-GAAP billings

$

405,695



$

252,364



$

747,747



$

467,319


 

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SOURCE DocuSign, Inc.