SAN FRANCISCO, Dec. 6, 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
October 31, 2018.
"With year-over-year growth of 37% in revenue and 40% in
billings, DocuSign's business continued to excel in the third
quarter. We added another 25,000 customers, bringing our total to
454,000 worldwide. Expansions within existing customers, traction
around our System of Agreement vision, and our strategic partner
ecosystem all contributed to our strong results," said Dan Springer, CEO of DocuSign.
Third Quarter Financial Highlights
- Total revenue was $178.4
million, an increase of 37% year-over-year. Subscription
revenue was $169.4 million, an
increase of 38% year-over-year. Professional services and other
revenue was $9.0 million, an increase
of 17% year-over-year.
- Billings were $198.0
million, an increase of 40% year-over-year.
- GAAP gross margin was 75%, compared to 76% in the same
period last year. Non-GAAP gross margin was 79% compared to 78% in
the same period last year.
- GAAP net loss per basic and diluted share was
$0.31 in the third quarter of fiscal
2019 on 168 million shares outstanding compared to GAAP net loss
per share of $0.45 in the third
quarter of fiscal 2018 on 33 million shares outstanding.
- Non-GAAP net income per diluted share was $0.00 in the third quarter of fiscal 2019 based
on 192 million shares outstanding compared to a non-GAAP net loss
per share of $0.17 in the third
quarter of fiscal 2018 based on 33 million shares outstanding.
- Net cash provided by operating activities was
$4.3 million, compared to
$11.6 million in the same period last
year.
- Free cash flow was negative $4.3
million in the third quarter of fiscal 2019 compared to free
cash flow of $7.0 million in the same
period last year.
- Cash, cash equivalents and restricted cash was
$1.1 billion at the end of the
quarter. Our cash balance reflects the addition of $560.8 million of proceeds net of offering
expenses from the issuance of Convertible Senior Notes on
September 18, 2018.
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 completed the
acquisition of SpringCM Inc., a leading cloud-based document
generation and contract lifecycle management software company, on
September 4, 2018 for $218.8 million in cash, subject to adjustment.
With SpringCM, DocuSign will accelerate customers' ability to
modernize their Systems of Agreement all the way from preparing to
signing, acting-on, and managing agreements.
- Convertible Senior Notes Offering. The company issued
$575.0 million in 0.5% Convertible
Senior Notes due 2023. The offering generated net proceeds of
$560.8 million. DocuSign used
$67.6 million of the net proceeds to
enter into capped call transactions to offset potential dilution
upon conversion or any cash payments. DocuSign intends to use the
remainder of the net proceeds for working capital, other general
corporate purposes and potential acquisitions.
Outlook
The company currently expects:
•
|
Quarter ending
January 31, 2019 (in millions, except percentages):
|
|
|
|
Total
revenue
|
$192
|
to
|
$194
|
|
Billings
|
$245
|
to
|
$255
|
|
Non-GAAP gross
margin
|
78%
|
to
|
81%
|
|
Non-GAAP sales and
marketing
|
50%
|
to
|
52%
|
|
Non-GAAP research and
development
|
16%
|
to
|
18%
|
|
Non-GAAP general and
administrative
|
11%
|
to
|
13%
|
|
Interest and other
income (expense)
|
$3
|
to
|
$4
|
|
Provision for income
taxes
|
$0.75
|
|
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
185
|
to
|
190
|
|
|
|
|
•
|
Year ending
January 31, 2019 (in millions, except percentages):
|
|
|
|
Total
revenue
|
$693
|
to
|
$695
|
|
Billings
|
$795
|
to
|
$805
|
|
Non-GAAP gross
margin
|
78%
|
to
|
81%
|
|
Non-GAAP sales and
marketing
|
50%
|
to
|
52%
|
|
Non-GAAP research and
development
|
16%
|
to
|
18%
|
|
Non-GAAP general and
administrative
|
11%
|
to
|
13%
|
|
Provision for income
taxes
|
$2
|
to
|
$4
|
|
Non-GAAP diluted
weighted-average shares outstanding
|
155
|
to
|
160
|
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 December 6, 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) December 20, 2018 using the passcode 13685199.
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 450,000
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 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 July 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, 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. 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
October 31,
|
|
Nine Months
Ended
October 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
Subscription
|
$
|
169,426
|
|
|
$
|
122,905
|
|
|
$
|
476,085
|
|
|
$
|
347,305
|
|
Professional services
and other
|
8,959
|
|
|
7,684
|
|
|
25,152
|
|
|
22,325
|
|
Total
revenue
|
178,385
|
|
|
130,589
|
|
|
501,237
|
|
|
369,630
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Subscription
|
28,709
|
|
|
22,335
|
|
|
84,204
|
|
|
61,668
|
|
Professional services
and other
|
16,364
|
|
|
8,881
|
|
|
55,524
|
|
|
25,130
|
|
Total cost of
revenue
|
45,073
|
|
|
31,216
|
|
|
139,728
|
|
|
86,798
|
|
Gross
profit
|
133,312
|
|
|
99,373
|
|
|
361,509
|
|
|
282,832
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
117,051
|
|
|
69,666
|
|
|
411,915
|
|
|
203,300
|
|
Research and
development
|
38,404
|
|
|
22,522
|
|
|
143,047
|
|
|
68,997
|
|
General and
administrative
|
36,274
|
|
|
19,528
|
|
|
170,242
|
|
|
55,923
|
|
Total
expenses
|
191,729
|
|
|
111,716
|
|
|
725,204
|
|
|
328,220
|
|
Loss from
operations
|
(58,417)
|
|
|
(12,343)
|
|
|
(363,695)
|
|
|
(45,388)
|
|
Interest
expense
|
(3,503)
|
|
|
(154)
|
|
|
(3,743)
|
|
|
(474)
|
|
Interest income and
other income (expense), net
|
3,395
|
|
|
(1,225)
|
|
|
4,165
|
|
|
699
|
|
Loss before
provision for (benefit from) income taxes
|
(58,525)
|
|
|
(13,722)
|
|
|
(363,273)
|
|
|
(45,163)
|
|
Provision for
(benefit from) income taxes
|
(5,712)
|
|
|
783
|
|
|
(3,059)
|
|
|
761
|
|
Net
loss
|
$
|
(52,813)
|
|
|
$
|
(14,505)
|
|
|
$
|
(360,214)
|
|
|
$
|
(45,924)
|
|
Net loss per share
attributable to common stockholders, basic and
diluted
|
$
|
(0.31)
|
|
|
$
|
(0.45)
|
|
|
$
|
(2.90)
|
|
|
$
|
(1.49)
|
|
Weighted-average
number of shares used in computing net loss per share attributable
to common stockholders, basic and diluted
|
167,736
|
|
|
33,353
|
|
|
124,343
|
|
|
31,604
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense included in costs and expenses:
|
|
|
|
|
|
|
|
Cost of
revenue—subscription
|
$
|
2,398
|
|
|
$
|
228
|
|
|
$
|
13,941
|
|
|
$
|
697
|
|
Cost of
revenue—professional services
|
3,578
|
|
|
253
|
|
|
22,445
|
|
|
742
|
|
Sales and
marketing
|
22,338
|
|
|
1,959
|
|
|
151,610
|
|
|
7,547
|
|
Research and
development
|
9,919
|
|
|
1,042
|
|
|
64,546
|
|
|
3,721
|
|
General and
administrative
|
13,515
|
|
|
3,113
|
|
|
109,165
|
|
|
10,806
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
(in thousands,
except share and per share data)
|
October 31,
2018
|
|
January 31,
2018
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,094,133
|
|
|
$
|
256,867
|
|
Restricted
cash
|
367
|
|
|
569
|
|
Accounts
receivable
|
130,611
|
|
|
123,750
|
|
Contract
assets—current
|
12,056
|
|
|
14,260
|
|
Prepaid expense and
other current assets
|
28,344
|
|
|
23,349
|
|
Total current
assets
|
1,265,511
|
|
|
418,795
|
|
Property and
equipment, net
|
73,965
|
|
|
63,019
|
|
Goodwill
|
194,533
|
|
|
37,306
|
|
Intangible assets,
net
|
79,161
|
|
|
14,148
|
|
Deferred contract
acquisition costs—noncurrent
|
97,091
|
|
|
75,535
|
|
Other
assets—noncurrent
|
9,175
|
|
|
11,170
|
|
Total
assets
|
$
|
1,719,436
|
|
|
$
|
619,973
|
|
Liabilities,
Redeemable Convertible Preferred Stock and Stockholders' Equity
(Deficit)
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
22,059
|
|
|
$
|
23,713
|
|
Accrued
expenses
|
22,669
|
|
|
15,734
|
|
Accrued
compensation
|
53,686
|
|
|
50,852
|
|
Contract
liabilities—current
|
316,619
|
|
|
270,188
|
|
Deferred
rent—current
|
2,029
|
|
|
1,758
|
|
Other
liabilities—current
|
17,574
|
|
|
11,574
|
|
Total current
liabilities
|
434,636
|
|
|
373,819
|
|
Convertible senior
notes, net
|
432,572
|
|
|
—
|
|
Contract
liabilities—noncurrent
|
7,135
|
|
|
7,736
|
|
Deferred
rent—noncurrent
|
23,050
|
|
|
23,044
|
|
Deferred tax
liability—noncurrent
|
2,500
|
|
|
2,511
|
|
Other
liabilities—noncurrent
|
9,374
|
|
|
4,010
|
|
Total
liabilities
|
909,267
|
|
|
411,120
|
|
Redeemable
convertible preferred stock
|
—
|
|
|
547,501
|
|
Stockholders' equity
(deficit)
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
16
|
|
|
4
|
|
Additional paid-in
capital
|
1,676,180
|
|
|
160,265
|
|
Accumulated other
comprehensive (loss) income
|
(3,493)
|
|
|
3,403
|
|
Accumulated
deficit
|
(862,534)
|
|
|
(502,320)
|
|
Total stockholders'
equity (deficit)
|
810,169
|
|
|
(338,648)
|
|
Total liabilities,
redeemable convertible preferred stock, and stockholders' equity
(deficit)
|
$
|
1,719,436
|
|
|
$
|
619,973
|
|
DOCUSIGN,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(52,813)
|
|
|
$
|
(14,505)
|
|
|
$
|
(360,214)
|
|
|
$
|
(45,924)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
10,343
|
|
|
8,318
|
|
|
26,024
|
|
|
23,703
|
|
Amortization of
deferred contract acquisition and fulfillment costs
|
10,743
|
|
|
7,731
|
|
|
29,889
|
|
|
22,022
|
|
Amortization of debt
discount and transaction costs
|
3,147
|
|
|
—
|
|
|
3,147
|
|
|
—
|
|
Stock-based
compensation expense
|
51,748
|
|
|
6,595
|
|
|
361,707
|
|
|
23,513
|
|
Deferred income
taxes
|
(7,335)
|
|
|
58
|
|
|
(7,347)
|
|
|
58
|
|
Other
|
(1,204)
|
|
|
1,805
|
|
|
(2,079)
|
|
|
(21)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
(14,019)
|
|
|
(146)
|
|
|
1,366
|
|
|
12,962
|
|
Contract
assets
|
1,625
|
|
|
(1,338)
|
|
|
2,774
|
|
|
(2,313)
|
|
Prepaid expenses and
other current assets
|
1,023
|
|
|
(3,472)
|
|
|
(2,383)
|
|
|
(4,128)
|
|
Deferred contract
acquisition and fulfillment costs
|
(22,206)
|
|
|
(12,023)
|
|
|
(52,545)
|
|
|
(32,222)
|
|
Other
assets
|
667
|
|
|
(165)
|
|
|
2,002
|
|
|
(333)
|
|
Accounts
payable
|
(956)
|
|
|
726
|
|
|
(5,990)
|
|
|
(5,545)
|
|
Accrued
expenses
|
1,304
|
|
|
1,735
|
|
|
3,610
|
|
|
1,218
|
|
Accrued
compensation
|
1,811
|
|
|
3,227
|
|
|
2,171
|
|
|
(1,753)
|
|
Contract
liabilities
|
16,353
|
|
|
11,309
|
|
|
35,856
|
|
|
30,445
|
|
Deferred
rent
|
574
|
|
|
(110)
|
|
|
277
|
|
|
(174)
|
|
Other
liabilities
|
3,456
|
|
|
1,873
|
|
|
3,684
|
|
|
1,511
|
|
Net cash provided by
operating activities
|
4,261
|
|
|
11,618
|
|
|
41,949
|
|
|
23,019
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Cash paid for
acquisition, net of acquired cash
|
(218,779)
|
|
|
—
|
|
|
(218,779)
|
|
|
—
|
|
Purchases of property
and equipment
|
(8,576)
|
|
|
(4,603)
|
|
|
(19,096)
|
|
|
(15,692)
|
|
Proceeds from sale of
business held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
467
|
|
Net cash used in
investing activities
|
(227,355)
|
|
|
(4,603)
|
|
|
(237,875)
|
|
|
(15,225)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of convertible senior notes, net of initial purchasers'
discounts and transaction costs
|
560,756
|
|
|
—
|
|
|
560,756
|
|
|
—
|
|
Purchase of capped
calls related to issuance of convertible senior notes
|
(67,563)
|
|
|
—
|
|
|
(67,563)
|
|
|
—
|
|
Proceeds from
issuance of common stock in initial public offering, net of
underwriting commissions
|
—
|
|
|
—
|
|
|
529,305
|
|
|
—
|
|
Proceeds from the
exercise of stock options
|
5,047
|
|
|
8,437
|
|
|
15,365
|
|
|
21,946
|
|
Payment of deferred
offering costs
|
(170)
|
|
|
—
|
|
|
(3,692)
|
|
|
—
|
|
Payment of holdback
on prior acquisition
|
—
|
|
|
(390)
|
|
|
—
|
|
|
(390)
|
|
Net cash provided by
financing activities
|
498,070
|
|
|
8,047
|
|
|
1,034,171
|
|
|
21,556
|
|
Effect of foreign
exchange on cash, cash equivalents and restricted cash
|
362
|
|
|
(571)
|
|
|
(1,181)
|
|
|
1,572
|
|
Net increase in cash,
cash equivalents and restricted cash
|
275,338
|
|
|
14,491
|
|
|
837,064
|
|
|
30,922
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
819,162
|
|
|
207,675
|
|
|
257,436
|
|
|
191,244
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
1,094,500
|
|
|
$
|
222,166
|
|
|
$
|
1,094,500
|
|
|
$
|
222,166
|
|
DOCUSIGN,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
Reconciliation of
gross profit and gross margin:
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP gross
profit
|
$
|
133,312
|
|
|
$
|
99,373
|
|
|
$
|
361,509
|
|
|
$
|
282,832
|
|
Add: Stock-based
compensation
|
5,976
|
|
|
481
|
|
|
36,386
|
|
|
1,439
|
|
Add: Amortization of
acquisition-related intangibles
|
1,632
|
|
|
1,691
|
|
|
4,303
|
|
|
5,079
|
|
Add:
Acquisition-related expenses
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Non-GAAP gross
profit
|
$
|
141,028
|
|
|
$
|
101,545
|
|
|
$
|
402,306
|
|
|
$
|
289,350
|
|
GAAP gross
margin
|
75
|
%
|
|
76
|
%
|
|
72
|
%
|
|
77
|
%
|
Non-GAAP
adjustments
|
4
|
%
|
|
2
|
%
|
|
8
|
%
|
|
1
|
%
|
Non-GAAP gross
margin
|
79
|
%
|
|
78
|
%
|
|
80
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|
|
GAAP subscription
gross profit
|
$
|
140,717
|
|
|
$
|
100,570
|
|
|
$
|
391,881
|
|
|
$
|
285,637
|
|
Add: Stock-based
compensation
|
2,398
|
|
|
228
|
|
|
13,941
|
|
|
697
|
|
Add: Amortization of
acquisition-related intangibles
|
1,632
|
|
|
1,691
|
|
|
4,303
|
|
|
5,079
|
|
Non-GAAP subscription
gross profit
|
$
|
144,747
|
|
|
$
|
102,489
|
|
|
$
|
410,125
|
|
|
$
|
291,413
|
|
GAAP subscription
gross margin
|
83
|
%
|
|
82
|
%
|
|
82
|
%
|
|
82
|
%
|
Non-GAAP
adjustments
|
2
|
%
|
|
1
|
%
|
|
4
|
%
|
|
2
|
%
|
Non-GAAP subscription
gross margin
|
85
|
%
|
|
83
|
%
|
|
86
|
%
|
|
84
|
%
|
|
|
|
|
|
|
|
|
GAAP professional
services and other gross loss
|
$
|
(7,405)
|
|
|
$
|
(1,197)
|
|
|
$
|
(30,372)
|
|
|
$
|
(2,805)
|
|
Add: Stock-based
compensation
|
3,578
|
|
|
253
|
|
|
22,445
|
|
|
742
|
|
Add:
Acquisition-related expenses
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
Non-GAAP professional
services and other gross loss
|
$
|
(3,719)
|
|
|
$
|
(944)
|
|
|
$
|
(7,819)
|
|
|
$
|
(2,063)
|
|
GAAP professional
services and other gross loss
|
(83)
|
%
|
|
(16)
|
%
|
|
(121)
|
%
|
|
(13)
|
%
|
Non-GAAP
adjustments
|
41
|
%
|
|
4
|
%
|
|
90
|
%
|
|
4
|
%
|
Non-GAAP professional
services and other gross loss
|
(42)
|
%
|
|
(12)
|
%
|
|
(31)
|
%
|
|
(9)
|
%
|
Reconciliation of
operating expenses:
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP sales and
marketing
|
$
|
117,051
|
|
|
$
|
69,666
|
|
|
$
|
411,915
|
|
|
$
|
203,300
|
|
Less: Stock-based
compensation
|
(22,338)
|
|
|
(1,959)
|
|
|
(151,610)
|
|
|
(7,547)
|
|
Less: Amortization of
acquisition-related intangibles
|
(2,257)
|
|
|
(1,015)
|
|
|
(3,787)
|
|
|
(2,520)
|
|
Less:
Acquisition-related expenses
|
(68)
|
|
|
—
|
|
|
(68)
|
|
|
—
|
|
Non-GAAP sales and
marketing
|
$
|
92,388
|
|
|
$
|
66,692
|
|
|
$
|
256,450
|
|
|
$
|
193,233
|
|
GAAP sales and
marketing as a percentage of revenue
|
66
|
%
|
|
53
|
%
|
|
82
|
%
|
|
55
|
%
|
Non-GAAP sales and
marketing as a percentage of revenue
|
52
|
%
|
|
51
|
%
|
|
51
|
%
|
|
52
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development
|
$
|
38,404
|
|
|
$
|
22,522
|
|
|
$
|
143,047
|
|
|
$
|
68,997
|
|
Less: Stock-based
compensation
|
(9,919)
|
|
|
(1,042)
|
|
|
(64,546)
|
|
|
(3,721)
|
|
Less:
Acquisition-related expenses
|
(302)
|
|
|
—
|
|
|
(302)
|
|
|
—
|
|
Non-GAAP research and
development
|
$
|
28,183
|
|
|
$
|
21,480
|
|
|
$
|
78,199
|
|
|
$
|
65,276
|
|
GAAP research and
development as a percentage of revenue
|
22
|
%
|
|
17
|
%
|
|
29
|
%
|
|
19
|
%
|
Non-GAAP research and
development as a percentage of revenue
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
GAAP general and
administrative
|
$
|
36,274
|
|
|
$
|
19,528
|
|
|
$
|
170,242
|
|
|
$
|
55,923
|
|
Less: Stock-based
compensation
|
(13,515)
|
|
|
(3,113)
|
|
|
(109,165)
|
|
|
(10,806)
|
|
Less:
Acquisition-related expenses
|
(1,290)
|
|
|
—
|
|
|
(1,290)
|
|
|
—
|
|
Non-GAAP general and
administrative
|
$
|
21,469
|
|
|
$
|
16,415
|
|
|
$
|
59,787
|
|
|
$
|
45,117
|
|
GAAP general and
administrative as a percentage of revenue
|
20
|
%
|
|
15
|
%
|
|
34
|
%
|
|
15
|
%
|
Non-GAAP general and
administrative as a percentage of revenue
|
12
|
%
|
|
13
|
%
|
|
12
|
%
|
|
12
|
%
|
Reconciliation of
income (loss) from operations and operating margin:
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP operating
loss
|
$
|
(58,417)
|
|
|
$
|
(12,343)
|
|
|
$
|
(363,695)
|
|
|
$
|
(45,388)
|
|
Add: Stock-based
compensation
|
51,748
|
|
|
6,595
|
|
|
361,707
|
|
|
23,513
|
|
Add: Amortization of
acquisition-related intangibles
|
3,889
|
|
|
2,706
|
|
|
8,090
|
|
|
7,599
|
|
Add:
Acquisition-related expenses
|
1,768
|
|
|
—
|
|
|
1,768
|
|
|
—
|
|
Non-GAAP operating
income (loss)
|
$
|
(1,012)
|
|
|
$
|
(3,042)
|
|
|
$
|
7,870
|
|
|
$
|
(14,276)
|
|
GAAP operating
margin
|
(33)
|
%
|
|
(9)
|
%
|
|
(73)
|
%
|
|
(12)
|
%
|
Non-GAAP
adjustments
|
32
|
%
|
|
7
|
%
|
|
75
|
%
|
|
8
|
%
|
Non-GAAP operating
margin (loss)
|
(1)
|
%
|
|
(2)
|
%
|
|
2
|
%
|
|
(4)
|
%
|
Reconciliation of
net income (loss) and net income (loss) per share, basic and
diluted:
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP net
loss
|
$
|
(52,813)
|
|
|
$
|
(14,505)
|
|
|
$
|
(360,214)
|
|
|
$
|
(45,924)
|
|
Add: Stock-based
compensation
|
51,748
|
|
|
6,595
|
|
|
361,707
|
|
|
23,513
|
|
Add: Amortization of
acquisition-related intangibles
|
3,889
|
|
|
2,706
|
|
|
8,090
|
|
|
7,599
|
|
Add:
Acquisition-related expenses
|
1,839
|
|
|
—
|
|
|
1,839
|
|
|
—
|
|
Add: Amortization of
debt discount and issuance costs
|
3,147
|
|
|
—
|
|
|
3,147
|
|
|
—
|
|
Less: Tax benefit
from SpringCM acquisition(1)
|
(7,369)
|
|
|
—
|
|
|
(7,369)
|
|
|
—
|
|
Non-GAAP net income
(loss)
|
$
|
441
|
|
|
$
|
(5,204)
|
|
|
$
|
7,200
|
|
|
$
|
(14,812)
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
$
|
441
|
|
|
$
|
(5,204)
|
|
|
$
|
7,200
|
|
|
$
|
(14,812)
|
|
Less: preferred stock
accretion
|
—
|
|
|
(376)
|
|
|
(353)
|
|
|
(1,097)
|
|
Less: net income
allocated to participating securities
|
—
|
|
|
—
|
|
|
(1,427)
|
|
|
—
|
|
Non-GAAP net income
(loss) attributable to common stockholders
|
$
|
441
|
|
|
$
|
(5,580)
|
|
|
$
|
5,420
|
|
|
$
|
(15,909)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding, basic
|
167,736
|
|
|
33,353
|
|
|
124,343
|
|
|
31,604
|
|
Effect of dilutive
securities
|
24,490
|
|
|
—
|
|
|
24,554
|
|
|
—
|
|
Non-GAAP
weighted-average common shares outstanding, diluted
|
192,226
|
|
|
33,353
|
|
|
148,897
|
|
|
31,604
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, basic and diluted
|
$
|
(0.31)
|
|
|
$
|
(0.45)
|
|
|
$
|
(2.90)
|
|
|
$
|
(1.49)
|
|
Non-GAAP net income
(loss) per share, basic
|
0.00
|
|
|
(0.17)
|
|
|
0.04
|
|
|
(0.50)
|
|
Non-GAAP net income
(loss) per share, diluted
|
0.00
|
|
|
(0.17)
|
|
|
0.04
|
|
|
(0.50)
|
|
|
|
(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
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash provided by
operating activities
|
$
|
4,261
|
|
|
$
|
11,618
|
|
|
$
|
41,949
|
|
|
$
|
23,019
|
|
Less: purchase of
property and equipment
|
(8,576)
|
|
|
(4,603)
|
|
|
(19,096)
|
|
|
(15,692)
|
|
Non-GAAP free cash
flow
|
$
|
(4,315)
|
|
|
$
|
7,015
|
|
|
$
|
22,853
|
|
|
$
|
7,327
|
|
Computation of
billings:
|
|
|
Three Months
Ended
October 31,
|
|
Nine Months
Ended
October 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
|
178,385
|
|
|
$
|
130,589
|
|
|
$
|
501,237
|
|
|
$
|
369,630
|
|
Add: Contract
liabilities and refund liability, end of period
|
330,060
|
|
|
226,836
|
|
|
330,060
|
|
|
226,836
|
|
Less: Contract
liabilities and refund liability, beginning of period
|
(300,426)
|
|
|
(214,405)
|
|
|
(282,943)
|
|
|
(195,501)
|
|
Add: Contract assets
and unbilled accounts receivable, beginning of period
|
16,196
|
|
|
11,381
|
|
|
16,899
|
|
|
10,095
|
|
Less: Contract assets
and unbilled accounts receivable, end of period
|
(15,229)
|
|
|
(12,678)
|
|
|
(15,229)
|
|
|
(12,678)
|
|
Less: Contract
liabilities and refund liability contributed by the acquisition of
SpringCM
|
(11,002)
|
|
|
—
|
|
|
(11,002)
|
|
|
—
|
|
Non-GAAP
billings
|
$
|
197,984
|
|
|
$
|
141,723
|
|
|
$
|
539,022
|
|
|
$
|
398,382
|
|
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SOURCE DocuSign, Inc.