DocuSign Announces Second Quarter Fiscal 2021 Financial Results

Cloud
04.09.2020 04:06 pm

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.