SAN FRANCISCO, Sept. 5, 2018 /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 fiscal quarter ended July 31,
2018.
"We had a strong second quarter, driven by 35% year-over-year
growth in subscription revenue. We added more than 25,000
customers, bringing our customer base to almost 430,000 worldwide,"
said Dan Springer, CEO of DocuSign.
"And this week, we also closed our previously-announced acquisition
of SpringCM, which accelerates our vision to modernize the world's
Systems of Agreement—all the way from preparing to signing,
acting-on, and managing agreements. With SpringCM, we have a
broader set of products to sell, additional technologies to
commercialize and a team whose experience complements ours almost
perfectly."
Second Quarter Financial Highlights
- Total revenue was $167.0
million, an increase of 33% year-over-year. Subscription
revenue was $158.5 million, an
increase of 35% year-over-year. Professional services and other
revenue was $8.6 million, an increase
of 7% year-over-year.
- Billings were $172.2
million, an increase of 32% year-over-year.
- GAAP gross margin was 78%, compared to 77% in the same
period last year. Non-GAAP gross margin was 81% compared to 79% in
the same period last year.
- GAAP net loss per basic and diluted share was
$0.22 in the second quarter of fiscal
2019 on 166 million shares outstanding compared to GAAP net loss
per share of $0.39 in the second
quarter of fiscal 2018 on 32 million shares outstanding.
- Non-GAAP net income per diluted share was $0.03 in the second quarter of fiscal 2019 based
on 191 million shares outstanding compared to a non-GAAP net loss
per share of $0.05 in the second
quarter of fiscal 2018 based on 32 million shares outstanding.
- Net cash provided by operating activities was
$22.7 million, compared to
$12.1 million in the same period last
year.
- Free cash flow was $18.4
million in the second quarter of fiscal 2019 compared to
free cash flow of $7.8 million in the
same period last year.
- Cash, cash equivalents and restricted cash was
$819.2 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
- SpringCM Inc. Acquisition. The company signed a
definitive agreement to acquire Spring CM Inc. for approximately
$220 million in cash, subject to
adjustment, on July 31, 2018.
The acquisition was completed on September
4, 2018.
- Board and Management Transitions. Effective August 29, 2018, three new directors joined
DocuSign's board: former GoDaddy CEO Blake
Irving, Docker chairman and CEO Steve Singh, and IBM Watson business unit GM
Inhi Cho Suh, replacing Scott Darling, Rory
O'Driscoll and Jonathan
Roberts. As part of this planned transition, DocuSign
founder Tom Gonser, and current
chairman Keith Krach will leave
their board roles on December 31,
2018 and January 1, 2019,
respectively. In addition, Neil
Hudspith notified us that after six years of leading
DocuSign's sales and customer operations, he intends to retire from
his role as President, Worldwide Field Operations at the end of
this fiscal year.
Outlook
•
|
Quarter ending
October 31, 2018* (in millions, except percentages):
|
|
|
|
Total
revenue
|
$172
|
to
|
$175
|
|
Billings
|
$169
|
to
|
$179
|
|
Non-GAAP gross
margin
|
78%
|
to
|
81%
|
|
Non-GAAP sales and
marketing
|
50%
|
to
|
52%
|
|
Non-GAAP research and
development
|
17%
|
to
|
19%
|
|
Non-GAAP general and
administrative
|
11%
|
to
|
13%
|
|
Other
expense
|
<$0.5
|
|
|
|
Provision for income
taxes
|
$0.75
|
|
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
190
|
to
|
195
|
|
|
|
|
|
|
|
|
|
|
•
|
Year ending
January 31, 2019* (in millions, except percentages):
|
|
|
|
Total
revenue
|
$683
|
to
|
$688
|
|
Billings
|
$732
|
to
|
$752
|
|
Non-GAAP gross
margin
|
78%
|
to
|
81%
|
|
Non-GAAP sales and
marketing
|
50%
|
to
|
52%
|
|
Non-GAAP research and
development
|
17%
|
to
|
19%
|
|
Non-GAAP general and
administrative
|
11%
|
to
|
13%
|
|
Other
expense
|
<$2
|
|
|
|
Provision for income
taxes
|
$3
|
|
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
160
|
to
|
165
|
|
|
|
*These guidance
ranges include estimated revenue contributions from SpringCM of $2
to $4 million in the third quarter of fiscal 2019 and $7 to $9
million in fiscal 2019 and operating losses of $5 to $7 million in
the third quarter of fiscal 2019 and $9 to $12 million in fiscal
2019, including $3 to $4 million of one-time integration
costs.
|
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 5,
2018 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) September 19, 2018 using the passcode 13682692.
About DocuSign
DocuSign (Nasdaq: DOCU) helps organizations become more
agree-able by connecting and automating how they prepare, sign,
act-on, and manage agreements. As part of our System of Agreement
(SofA) platform, we offer DocuSign eSignature—the world's #1 way to
sign electronically on practically any device, from anywhere, at
any time. Almost 430,000 customers and hundreds of millions of
users worldwide already 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 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 implement our plans,
forecasts and other expectations with respect to SpringCM's
business; our ability to realize the anticipated benefits of
acquisition of SpringCM, including the possibility that the
expected benefits from the acquisition will not be realized or will
not be realized within the expected time period; disruption from
the acquisition making it more difficult to maintain business and
operational relationships; the negative effects of consummation of
the acquisition on the market price of our common stock or on our
operating results; unknown liabilities from the acquisition; 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 and rapid technological change, increased competition on our
market and our ability to compete effectively, and expansion of our
operations and increased adoption of our platform internationally.
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 April 30, 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, amortization of
acquisition-related intangibles and, as applicable, other special
items. We believe it is useful to exclude stock-based compensation
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. We also view amortization of acquisition-related
intangible assets, such as the amortization of the cost associated
with an acquired company's developed technology and trade
names, as items arising from pre-acquisition activities determined
at the time of an acquisition. While these intangible assets are
continually evaluated for impairment, amortization of the cost of
purchased intangibles is a static expense, one that is not
typically affected by operations during any particular period.
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
July 31,
|
|
Six Months Ended
July 31,
|
(in thousands,
except share and per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
|
158,461
|
|
|
$
|
117,553
|
|
|
$
|
306,659
|
|
|
$
|
224,400
|
|
Professional services
and other
|
8,583
|
|
|
7,990
|
|
|
16,193
|
|
|
14,641
|
|
Total
revenue
|
167,044
|
|
|
125,543
|
|
|
322,852
|
|
|
239,041
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
23,057
|
|
|
20,040
|
|
|
55,495
|
|
|
39,333
|
|
Professional services
and other
|
13,304
|
|
|
8,418
|
|
|
39,160
|
|
|
16,249
|
|
Total cost of
revenue
|
36,361
|
|
|
28,458
|
|
|
94,655
|
|
|
55,582
|
|
Gross
profit
|
130,683
|
|
|
97,085
|
|
|
228,197
|
|
|
183,459
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
103,779
|
|
|
68,943
|
|
|
294,864
|
|
|
133,634
|
|
Research and
development
|
33,773
|
|
|
23,767
|
|
|
104,643
|
|
|
46,475
|
|
General and
administrative
|
30,851
|
|
|
18,156
|
|
|
133,968
|
|
|
36,395
|
|
Total
expenses
|
168,403
|
|
|
110,866
|
|
|
533,475
|
|
|
216,504
|
|
Loss from
operations
|
(37,720)
|
|
|
(13,781)
|
|
|
(305,278)
|
|
|
(33,045)
|
|
Interest
expense
|
(47)
|
|
|
(169)
|
|
|
(240)
|
|
|
(320)
|
|
Interest and other
income, net
|
2,998
|
|
|
2,034
|
|
|
770
|
|
|
1,924
|
|
Loss before
provision for (benefit from) income taxes
|
(34,769)
|
|
|
(11,916)
|
|
|
(304,748)
|
|
|
(31,441)
|
|
Provision for
(benefit from) income taxes
|
1,945
|
|
|
121
|
|
|
2,653
|
|
|
(22)
|
|
Net
loss
|
$
|
(36,714)
|
|
|
$
|
(12,037)
|
|
|
$
|
(307,401)
|
|
|
$
|
(31,419)
|
|
Net loss per share
attributable to common stockholders, basic and
diluted
|
$
|
(0.22)
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.01)
|
|
|
$
|
(1.05)
|
|
Weighted-average
number of shares used in computing net loss per share attributable
to common stockholders, basic and diluted
|
166,083,686
|
|
|
31,638,340
|
|
|
102,284,494
|
|
|
30,715,624
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
|
1,588
|
|
|
$
|
231
|
|
|
$
|
11,543
|
|
|
$
|
469
|
|
Cost of
revenue—professional services
|
2,822
|
|
|
254
|
|
|
18,867
|
|
|
489
|
|
Sales and
marketing
|
16,791
|
|
|
2,883
|
|
|
129,272
|
|
|
5,588
|
|
Research and
development
|
7,359
|
|
|
1,288
|
|
|
54,627
|
|
|
2,679
|
|
General and
administrative
|
11,605
|
|
|
3,856
|
|
|
95,650
|
|
|
7,693
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(in thousands,
except share and per share data)
|
July 31,
2018
|
|
January 31,
2018
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
818,795
|
|
|
$
|
256,867
|
|
Restricted
cash
|
367
|
|
|
569
|
|
Accounts
receivable
|
108,365
|
|
|
123,750
|
|
Contract
assets—current
|
13,760
|
|
|
14,260
|
|
Prepaid expense and
other current assets
|
26,776
|
|
|
23,349
|
|
Total current
assets
|
968,063
|
|
|
418,795
|
|
Property and
equipment, net
|
60,415
|
|
|
63,019
|
|
Goodwill
|
35,369
|
|
|
37,306
|
|
Intangible assets,
net
|
10,139
|
|
|
14,148
|
|
Deferred contract
acquisition costs—noncurrent
|
86,199
|
|
|
75,535
|
|
Other
assets—noncurrent
|
9,513
|
|
|
11,170
|
|
Total
assets
|
$
|
1,169,698
|
|
|
$
|
619,973
|
|
Liabilities,
Redeemable Convertible Preferred Stock and Stockholders' Equity
(Deficit)
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
16,653
|
|
|
$
|
23,713
|
|
Accrued
expenses
|
18,368
|
|
|
15,734
|
|
Accrued
compensation
|
51,212
|
|
|
50,852
|
|
Contract
liabilities—current
|
289,724
|
|
|
270,188
|
|
Deferred
rent—current
|
1,872
|
|
|
1,758
|
|
Other
liabilities—current
|
11,761
|
|
|
11,574
|
|
Total current
liabilities
|
389,590
|
|
|
373,819
|
|
Contract
liabilities—noncurrent
|
7,703
|
|
|
7,736
|
|
Deferred
rent—noncurrent
|
22,633
|
|
|
23,044
|
|
Deferred tax
liability—noncurrent
|
2,499
|
|
|
2,511
|
|
Other
liabilities—noncurrent
|
3,803
|
|
|
4,010
|
|
Total
liabilities
|
426,228
|
|
|
411,120
|
|
Redeemable
convertible preferred stock
|
—
|
|
|
547,501
|
|
Stockholders' equity
(deficit)
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
16
|
|
|
4
|
|
Additional paid-in
capital
|
1,555,185
|
|
|
160,265
|
|
Accumulated other
comprehensive (loss) income
|
(2,010)
|
|
|
3,403
|
|
Accumulated
deficit
|
(809,721)
|
|
|
(502,320)
|
|
Total stockholders'
equity (deficit)
|
743,470
|
|
|
(338,648)
|
|
Total liabilities,
redeemable convertible preferred stock, and stockholders' equity
(deficit)
|
$
|
1,169,698
|
|
|
$
|
619,973
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(36,714)
|
|
|
$
|
(12,037)
|
|
|
$
|
(307,401)
|
|
|
$
|
(31,419)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
7,081
|
|
|
7,699
|
|
|
15,681
|
|
|
15,385
|
|
Amortization of
deferred contract acquisition and fulfillment costs
|
9,900
|
|
|
7,278
|
|
|
19,146
|
|
|
14,291
|
|
Stock-based
compensation expense
|
40,165
|
|
|
8,512
|
|
|
309,959
|
|
|
16,918
|
|
Deferred income
taxes
|
(6)
|
|
|
13
|
|
|
(12)
|
|
|
—
|
|
Other
|
(3,100)
|
|
|
(1,023)
|
|
|
(875)
|
|
|
(1,826)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
(4,237)
|
|
|
1,531
|
|
|
15,385
|
|
|
13,108
|
|
Contract
assets
|
(1,397)
|
|
|
(937)
|
|
|
1,149
|
|
|
(975)
|
|
Prepaid expenses and
other current assets
|
3,113
|
|
|
4,914
|
|
|
(3,406)
|
|
|
(656)
|
|
Deferred contract
acquisition and fulfillment costs
|
(18,013)
|
|
|
(10,827)
|
|
|
(30,339)
|
|
|
(20,199)
|
|
Other
assets
|
895
|
|
|
(1,052)
|
|
|
1,335
|
|
|
(168)
|
|
Accounts
payable
|
2,184
|
|
|
(4,146)
|
|
|
(5,034)
|
|
|
(6,271)
|
|
Accrued
expenses
|
(996)
|
|
|
529
|
|
|
2,306
|
|
|
(517)
|
|
Accrued
compensation
|
17,307
|
|
|
4,148
|
|
|
360
|
|
|
(4,980)
|
|
Contract
liabilities
|
6,892
|
|
|
6,109
|
|
|
19,503
|
|
|
19,136
|
|
Deferred
rent
|
(168)
|
|
|
2,138
|
|
|
(297)
|
|
|
(64)
|
|
Other
liabilities
|
(211)
|
|
|
(751)
|
|
|
228
|
|
|
(362)
|
|
Net cash provided by
operating activities
|
22,695
|
|
|
12,098
|
|
|
37,688
|
|
|
11,401
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(4,336)
|
|
|
(4,319)
|
|
|
(10,520)
|
|
|
(11,089)
|
|
Proceeds from sale of
business held for sale
|
—
|
|
|
467
|
|
|
—
|
|
|
467
|
|
Net cash used in
investing activities
|
(4,336)
|
|
|
(3,852)
|
|
|
(10,520)
|
|
|
(10,622)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock in initial public offering, net of
underwriting commissions
|
529,305
|
|
|
—
|
|
|
529,305
|
|
|
—
|
|
Proceeds from the
exercise of stock options
|
2,503
|
|
|
7,679
|
|
|
10,318
|
|
|
13,509
|
|
Payment of deferred
offering costs
|
(1,328)
|
|
|
—
|
|
|
(3,522)
|
|
|
—
|
|
Net cash provided by
financing activities
|
530,480
|
|
|
7,679
|
|
|
536,101
|
|
|
13,509
|
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
527
|
|
|
1,659
|
|
|
(1,543)
|
|
|
2,143
|
|
Net increase in cash,
cash equivalents and restricted cash
|
549,366
|
|
|
17,584
|
|
|
561,726
|
|
|
16,431
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
269,796
|
|
|
190,091
|
|
|
257,436
|
|
|
191,244
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
819,162
|
|
|
$
|
207,675
|
|
|
$
|
819,162
|
|
|
$
|
207,675
|
|
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)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP gross
profit
|
$
|
130,683
|
|
|
$
|
97,085
|
|
|
$
|
228,197
|
|
|
$
|
183,459
|
|
Add: Stock-based
compensation
|
4,410
|
|
|
485
|
|
|
30,410
|
|
|
958
|
|
Add: Amortization of
acquisition-related intangibles
|
1,003
|
|
|
1,691
|
|
|
2,671
|
|
|
3,388
|
|
Non-GAAP gross
profit
|
$
|
136,096
|
|
|
$
|
99,261
|
|
|
$
|
261,278
|
|
|
$
|
187,805
|
|
GAAP gross
margin
|
78
|
%
|
|
77
|
%
|
|
71
|
%
|
|
77
|
%
|
Non-GAAP
adjustments
|
3
|
%
|
|
2
|
%
|
|
10
|
%
|
|
2
|
%
|
Non-GAAP gross
margin
|
81
|
%
|
|
79
|
%
|
|
81
|
%
|
|
79
|
%
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$
|
135,404
|
|
|
$
|
97,513
|
|
|
$
|
251,164
|
|
|
$
|
185,067
|
|
Add: Stock-based
compensation
|
1,588
|
|
|
231
|
|
|
11,543
|
|
|
469
|
|
Add: Amortization of
acquisition-related intangibles
|
1,003
|
|
|
1,691
|
|
|
2,671
|
|
|
3,388
|
|
Non-GAAP subscription
gross profit
|
$
|
137,995
|
|
|
$
|
99,435
|
|
|
$
|
265,378
|
|
|
$
|
188,924
|
|
GAAP subscription
gross margin
|
85
|
%
|
|
83
|
%
|
|
82
|
%
|
|
82
|
%
|
Non-GAAP
adjustments
|
2
|
%
|
|
2
|
%
|
|
5
|
%
|
|
2
|
%
|
Non-GAAP subscription
gross margin
|
87
|
%
|
|
85
|
%
|
|
87
|
%
|
|
84
|
%
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$
|
(4,721)
|
|
|
$
|
(428)
|
|
|
$
|
(22,967)
|
|
|
$
|
(1,608)
|
|
Add: Stock-based
compensation
|
2,822
|
|
|
254
|
|
|
18,867
|
|
|
489
|
|
Non-GAAP professional
services and other gross loss
|
$
|
(1,899)
|
|
|
$
|
(174)
|
|
|
$
|
(4,100)
|
|
|
$
|
(1,119)
|
|
GAAP professional
services and other gross loss
|
(55)
|
%
|
|
(5)
|
%
|
|
(142)
|
%
|
|
(11)
|
%
|
Non-GAAP
adjustments
|
33
|
%
|
|
3
|
%
|
|
117
|
%
|
|
3
|
%
|
Non-GAAP professional
services and other gross loss
|
(22)
|
%
|
|
(2)
|
%
|
|
(25)
|
%
|
|
(8)
|
%
|
Reconciliation of
operating expenses:
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP sales and
marketing
|
$
|
103,779
|
|
|
$
|
68,943
|
|
|
$
|
294,864
|
|
|
$
|
133,634
|
|
Less: Stock-based
compensation
|
(16,791)
|
|
|
(2,883)
|
|
|
(129,272)
|
|
|
(5,588)
|
|
Less: Amortization of
acquisition-related intangibles
|
(765)
|
|
|
(665)
|
|
|
(1,530)
|
|
|
(1,505)
|
|
Non-GAAP sales and
marketing
|
$
|
86,223
|
|
|
$
|
65,395
|
|
|
$
|
164,062
|
|
|
$
|
126,541
|
|
GAAP sales and
marketing as a percentage of revenue
|
62
|
%
|
|
55
|
%
|
|
91
|
%
|
|
56
|
%
|
Non-GAAP sales and
marketing as a percentage of revenue
|
52
|
%
|
|
52
|
%
|
|
51
|
%
|
|
53
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
|
33,773
|
|
|
$
|
23,767
|
|
|
$
|
104,643
|
|
|
$
|
46,475
|
|
Less: Stock-based
compensation
|
(7,359)
|
|
|
(1,288)
|
|
|
(54,627)
|
|
|
(2,679)
|
|
Non-GAAP research and
development
|
$
|
26,414
|
|
|
$
|
22,479
|
|
|
$
|
50,016
|
|
|
$
|
43,796
|
|
GAAP research and
development as a percentage of revenue
|
20
|
%
|
|
19
|
%
|
|
33
|
%
|
|
19
|
%
|
Non-GAAP research and
development as a percentage of revenue
|
16
|
%
|
|
18
|
%
|
|
15
|
%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
|
30,851
|
|
|
$
|
18,156
|
|
|
$
|
133,968
|
|
|
$
|
36,395
|
|
Less: Stock-based
compensation
|
(11,605)
|
|
|
(3,856)
|
|
|
(95,650)
|
|
|
(7,693)
|
|
Non-GAAP general and
administrative
|
$
|
19,246
|
|
|
$
|
14,300
|
|
|
$
|
38,318
|
|
|
$
|
28,702
|
|
GAAP general and
administrative as a percentage of revenue
|
19
|
%
|
|
14
|
%
|
|
42
|
%
|
|
16
|
%
|
Non-GAAP general and
administrative as a percentage of revenue
|
12
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP operating
loss
|
$
|
(37,720)
|
|
|
$
|
(13,781)
|
|
|
$
|
(305,278)
|
|
|
$
|
(33,045)
|
|
Add: Stock-based
compensation
|
40,165
|
|
|
8,512
|
|
|
309,959
|
|
|
16,918
|
|
Add: Amortization of
acquisition-related intangibles
|
1,768
|
|
|
2,356
|
|
|
4,201
|
|
|
4,893
|
|
Non-GAAP operating
income (loss)
|
$
|
4,213
|
|
|
$
|
(2,913)
|
|
|
$
|
8,882
|
|
|
$
|
(11,234)
|
|
GAAP operating
margin
|
(23)
|
%
|
|
(11)
|
%
|
|
(95)
|
%
|
|
(14)
|
%
|
Non-GAAP
adjustments
|
26
|
%
|
|
9
|
%
|
|
98
|
%
|
|
9
|
%
|
Non-GAAP operating
margin (loss)
|
3
|
%
|
|
(2)
|
%
|
|
3
|
%
|
|
(5)
|
%
|
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)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP net
loss
|
$
|
(36,714)
|
|
|
$
|
(12,037)
|
|
|
$
|
(307,401)
|
|
|
$
|
(31,419)
|
|
Add: Stock-based
compensation
|
40,165
|
|
|
8,512
|
|
|
309,959
|
|
|
16,918
|
|
Add: Amortization of
acquisition-related intangibles
|
1,768
|
|
|
2,356
|
|
|
4,201
|
|
|
4,893
|
|
Non-GAAP net income
(loss)
|
$
|
5,219
|
|
|
$
|
(1,169)
|
|
|
$
|
6,759
|
|
|
$
|
(9,608)
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
$
|
5,219
|
|
|
$
|
(1,169)
|
|
|
$
|
6,759
|
|
|
$
|
(9,608)
|
|
Less: preferred stock
accretion
|
—
|
|
|
(366)
|
|
|
(353)
|
|
|
(721)
|
|
Less: net income
allocated to participating securities
|
—
|
|
|
—
|
|
|
(2,085)
|
|
|
—
|
|
Non-GAAP net income
(loss) attributable to common stockholders
|
$
|
5,219
|
|
|
$
|
(1,535)
|
|
|
$
|
4,321
|
|
|
$
|
(10,329)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
166,084
|
|
|
31,638
|
|
|
102,284
|
|
|
30,716
|
|
Effect of dilutive
securities
|
25,339
|
|
|
—
|
|
|
24,586
|
|
|
—
|
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
191,423
|
|
|
31,638
|
|
|
126,870
|
|
|
30,716
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.22)
|
|
|
$
|
(0.39)
|
|
|
$
|
(3.01)
|
|
|
$
|
(1.05)
|
|
Non-GAAP net income
(loss) per share, basic
|
0.03
|
|
|
(0.05)
|
|
|
0.04
|
|
|
(0.34)
|
|
Non-GAAP net income
(loss) per share, diluted
|
0.03
|
|
|
(0.05)
|
|
|
0.03
|
|
|
(0.34)
|
|
Computation of
free cash flow:
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash provided by
operating activities
|
$
|
22,695
|
|
|
$
|
12,098
|
|
|
$
|
37,688
|
|
|
$
|
11,401
|
|
Less: purchase of
property and equipment
|
(4,336)
|
|
|
(4,319)
|
|
|
(10,520)
|
|
|
(11,089)
|
|
Non-GAAP free cash
flow
|
$
|
18,359
|
|
|
$
|
7,779
|
|
|
$
|
27,168
|
|
|
$
|
312
|
|
Computation of
billings:
|
|
|
Three Months Ended
July 31,
|
|
Six Months Ended
July 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
|
167,044
|
|
|
$
|
125,543
|
|
|
$
|
322,852
|
|
|
$
|
239,041
|
|
Add: Contract
liabilities and refund liability, end of period
|
300,426
|
|
|
214,405
|
|
|
300,426
|
|
|
214,405
|
|
Less: Contract
liabilities and refund liability, beginning of period
|
(293,667)
|
|
|
(208,882)
|
|
|
(282,943)
|
|
|
(195,501)
|
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
14,555
|
|
|
10,400
|
|
|
16,899
|
|
|
10,095
|
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(16,196)
|
|
|
(11,381)
|
|
|
(16,196)
|
|
|
(11,381)
|
|
Non-GAAP
billings
|
$
|
172,162
|
|
|
$
|
130,085
|
|
|
$
|
341,038
|
|
|
$
|
256,659
|
|
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SOURCE DocuSign, Inc.