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 October 31, 2020.

"As companies accelerate the digital transformation of their business and agreement processes, DocuSign's role as an essential cloud platform continues to grow," said Dan Springer, DocuSign CEO. "Our Q3 results reflect that tailwind, as well as the immediate and long-term value that customers see from eSignature and our broader Agreement Cloud."

Third Quarter Financial Highlights

·         Total revenue was $382.9 million, an increase of 53% year-over-year. Subscription revenue was $366.6 million, an increase of 54% year-over-year. Professional services and other revenue was $16.3 million, an increase of 43% year-over-year.

·         Billings were $440.4 million, an increase of 63% year-over-year.

·         GAAP gross margin was 74% compared to 75% in the same period last year. Non-GAAP gross margin was 79% in both comparative periods.

·         GAAP net loss per basic and diluted share was $0.31 on 186 million shares outstanding compared to $0.26 on 178 million shares outstanding in the same period last year.

·         Non-GAAP net income per diluted share was $0.22 on 206 million shares outstanding compared to $0.11 on 191 million shares outstanding in the same period last year.

·         Net cash provided by operating activities was $57.4 million compared to $1.9 million net cash used in operating activities in the same period last year.

·         Free cash flow was $38.1 million compared to negative $14.1 million in the same period last year.

·         Cash, cash equivalents, restricted cash and investments were $675.6 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 3. DocuSign announced more than a dozen new product capabilities to help customers get remote work done faster and easier. This includes:

·         eSignature for Slack which enables users to send and sign important documents from directly within Slack;

·         Drawing which streamlines processes by enabling a sender or signer to upload an image and leave free-form markups on the image;

·         Agreement Actions which allow admins to easily configure rules to automate common post-signature actions; and

·         iOS App Updates which includes an improved user experience and new features (including drag-and-drop tagging) for DocuSign's eSignature app for iOS.

·         New Products. DocuSign continues to expand the Agreement Cloud with new products that make agreement processes smarter, faster, and more secure.

·         DocuSign Analyzer helps customers negotiate better agreements, faster. It applies the AI-powered advanced contract analytics of DocuSign Insight to incoming contracts, accelerating contract review and negotiation while helping to manage risk.

·         DocuSign CLM+ adds AI-driven analytics from DocuSign Analyzer and Insight to DocuSign's market-leading CLM solution. This combination empowers organizations to automate manual tasks, orchestrate complex workflows and eliminate unnecessary risks intelligently by embedding analytics and machine learning across every stage of the agreement lifecycle.

·         DocuSign Monitor helps protect agreements with round-the-clock activity tracking. It uses advanced analytics to provide near real-time alerts—empowering security teams to detect unusual account activity, investigate incidents and respond to verified threats.

·         DocuSign Quote Gen for Salesforce CPQ+ allows Salesforce CPQ customers to leverage Gen for Salesforce as their document-generation solution within CPQ+.

Outlook

The company currently expects the following guidance:

▪  Quarter ending January 31, 2021 (in millions, except percentages):

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

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 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) December 17, 2020 using the passcode 13713254.