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DocuSign Announces Second Quarter Fiscal 2020 Financial Results

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SAN FRANCISCO, Sept. 5, 2019 /PRNewswire/ -- DocuSign (NASDAQ:DOCU), which offers the world's #1 eSignature solution as part of the DocuSign Agreement Cloud for digitally transforming how organizations prepare, sign, act on, and manage agreements, today announced results for its fiscal quarter ended July 31, 2019.

DocuSign, Inc. (PRNewsFoto/DocuSign, Inc.)

"With revenue growth exceeding 40% and billings growth at 47%, our second quarter performance reflects our clear leadership position in e-signature and increasing adoption of our broader Agreement Cloud offering," said Dan Springer, CEO of DocuSign. "In the second quarter, we added 29,000 new customers onto the platform, bringing our total to 537,000 worldwide. We truly believe the Agreement Cloud category has the potential to be as big as CRM and ERP one day and our customers are increasingly buying in."

Second Quarter Financial Highlights

  • Total revenue was $235.6 million, an increase of 41% year-over-year. Subscription revenue was $220.8 million, an increase of 39% year-over-year. Professional services and other revenue was $14.8 million, an increase of 72% year-over-year.
  • Billings were $252.4 million, an increase of 47% year-over-year.
  • GAAP gross margin was 74%, compared to 78% in the same period last year. Non-GAAP gross margin was 78% compared to 81% in the same period last year.
  • GAAP net loss per basic and diluted share was $0.39 on 175 million shares outstanding compared to GAAP net loss per share of $0.22 in the second quarter of fiscal 2019 on 166 million shares outstanding.
  • Non-GAAP net income per diluted share was $0.01 on 189 million shares outstanding compared to non-GAAP net income per share of $0.03 in the second quarter of fiscal 2019 on 191 million shares outstanding.
  • Net cash provided by operating activities was $26.4 million, compared to $22.7 million in the same period last year.
  • Free cash flow was $11.9 million in the second quarter of fiscal 2020 compared to free cash flow of $18.4 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $930.5 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 Summer '19 Release. As part of the company's ongoing commitment to innovation, several enhancements to the DocuSign Agreement Cloud were announced in the latest quarterly release: DocuSign Rooms for Mortgage, which accelerates closing times and improves the borrower experience with a secure, digital workspace for everyone involved in the process; Conditional Recipients, which allows customers to automate their existing workflows by configuring the rules on an envelope and automatically routing it to different recipients; eWitness, which allows signers to identify a witness and capture their information as part of agreements and deeds; eSignature API v2.1, which offers developers access to the same API that DocuSign uses internally and makes the very latest features available-such as comments, bulk envelopes, and more.
  • DocuSign for Forests. As part of its drive to create a significant and sustained impact on the world's environment, the company announced a new $1M commitment to The Wilderness Society, the leading American conservation organization working to protect the nation's wildlands. The investment will support the Society's efforts to ensure that wild forests stay healthy and intact for generations to come. DocuSign is also partnering with environmentalist and Grammy Award-winning singer-songwriter, Dave Matthews and his band (DMB) as a presenting sponsor for its Bama Green Project Eco-Village—an ongoing partnership between DMB and non-profit Reverb that encompasses the environmental efforts undertaken by the band while on the road, in the studio, or at home. These actions align closely with DocuSign's overall environmental protection efforts and demonstrate its long-term commitment to the cause.

Outlook

The company currently expects the following guidance:

Quarter ending October 31, 2019 (in millions, except percentages):




Total revenue

$237

to

$241


Billings

$260

to

$270


Non-GAAP gross margin

78%

to

80%


Non-GAAP sales and marketing

48%

to

50%


Non-GAAP research and development

15%

to

17%


Non-GAAP general and administrative

10%

to

12%


Interest and other income (expense)

$3

to

$4


Provision for income taxes

$1

to

$2


Non-GAAP diluted weighted-average shares outstanding

185

to

190





Year ending January 31, 2020 (in millions, except percentages):




Total revenue

$947

to

$951


Billings

$1,063

to

$1,083


Non-GAAP gross margin

78%

to

80%


Non-GAAP sales and marketing

48%

to

50%


Non-GAAP research and development

15%

to

17%


Non-GAAP general and administrative

11%

to

13%


Interest and other income (expense)

$13

to

$16


Provision for income taxes

$6

to

$8


Non-GAAP diluted weighted-average shares outstanding

190

to

195

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, 2019 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, 2019 using the passcode 13693623.

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, more than 535,000 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 2003-2019. 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 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 growth in adoption of our broader Agreement Cloud offering, the benefits of the DocuSign Agreement Cloud and enhancements to it, our estimated total addressable market and the impact of DocuSign Agreement Cloud on such market, including our belief that the Agreement Cloud category has the potential to be as big as CRM and ERP one day and that customers will share that belief, our ability to deliver product innovation, and our intentions to make charitable donations. They also include statements about our possible or assumed business strategies, potential growth opportunities 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 ca

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