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DocuSign Announces Third Quarter Fiscal 2020 Financial Results

December 05, 2019

SAN FRANCISCO, Dec. 5, 2019 /PRNewswire/ -- DocuSign, Inc. (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 October 31, 2019.

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

"We delivered another quarter of strong growth in billings and revenue, a significant expansion of our global customer base, and our eighth quarter of non-GAAP profitability," said Dan Springer, CEO, DocuSign. "Customers and partners alike are seeing the benefits of having a single platform that connects and automates the entire agreement process. As we continue to expand our suite of Agreement Cloud products, we believe DocuSign is poised to lead the next big category of cloud platforms."

Third Quarter Financial Highlights

  • Total revenue was $249.5 million, an increase of 40% year-over-year. Subscription revenue was $238.1 million, an increase of 41% year-over-year. Professional services and other revenue was $11.4 million, an increase of 28% year-over-year.
  • Billings were $269.4 million, an increase of 36% year-over-year.
  • GAAP gross margin was 75%, compared to 75% in the same period last year. Non-GAAP gross margin was 79% compared to 79% in the same period last year.
  • GAAP net loss per basic and diluted share was $0.26 on 178 million shares outstanding compared to GAAP net loss per share of $0.31 on 168 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.11 on 191 million shares outstanding compared to non-GAAP net income per share of $0.00 on 192 million shares outstanding in the same period last year.
  • Net cash used in operating activities was $1.9 million, compared to net cash provided by operating activities of $4.3 million in the same period last year.
  • Free cash flow was negative $14.1 million in the third quarter of fiscal 2020 compared to free cash flow of negative $4.3 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $912.0 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

  • Extending the DocuSign Agreement Cloud for Salesforce. Ahead of Dreamforce in November, DocuSign announced two new offerings. The first was DocuSign Negotiate, a dedicated solution for smaller companies that simplifies and accelerates the process of generating, redlining, and negotiating agreements-the current version of which is optimized for the Salesforce ecosystem. The second was DocuSign CLM, the next generation of SpringCM's enterprise-level contract lifecycle management solution. DocuSign eSignature for Salesforce CPQ was also enhanced this quarter, and now enables companies to collect a signer's payment method at the time of signature, storing it in Salesforce Billing for future or recurring payments.
  • Real estate solution developments. DocuSign released DocuSign Rooms API v2.0 on the Developer Center, which enables DocuSign Rooms functionality to be easily integrated into existing environments. DocuSign also renewed its partnership with Lone Wolf Technologies, marked by a deeper integration between DocuSign Rooms for Real Estate and Lone Wolf's zipForm Plus.
  • Executive appointments. As part of its drive to exceed the industry's most rigorous security standards and create the highest levels of customer trust, DocuSign appointed former United Airlines CISO Emily Heath to the new role of chief trust and security officer in October.

Outlook

The company currently expects the following guidance:

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




Total revenue

$263

to

$267


Billings

$346

to

$356


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%


Non-GAAP interest and other income (expense)

$3

to

$4


Provision for income taxes

$1

to

$2


Non-GAAP diluted weighted-average shares outstanding

190

to

195



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




Total revenue

$962

to

$966


Billings

$1,083

to

$1,093


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%


Non-GAAP interest and other income (expense)

$16

to

$17


Provision for income taxes

$5

to

$6


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 December 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 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 19, 2019 using the passcode 13696332.

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 560,000 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 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 benefits of the DocuSign Agreement Cloud and enhancements to it, additions to the Agreement Cloud suite of products, and the creation, size or growth of a new cloud platform category. They also include statements about our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations.

Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. 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 estimate the size of our total addressable market; our ability to effectively 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; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationship with developers; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions; our ability to successfully integrate the operations of businesses we may acquire, or to realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash and cash equivalents to satisfy our liquidity needs; our failure or the failure of our software suite of services to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel; our ability to estimate the size and potential growth of our target market; our ability to maintain proper and effective internal controls. 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 annual report on Form 10-K for the year ended January 31, 2019, our quarterly report on Form 10-Q for the quarter ended July 31, 2019, 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, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs from our convertible senior notes issued in September 2018, and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). 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)

2019


2018


2019


2018

Revenue:








Subscription

$

238,072



$

169,426



$

660,341



$

476,085


Professional services and other

11,430



8,959



38,735



25,152


Total revenue

249,502



178,385



699,076



501,237


Cost of revenue:








Subscription

43,178



28,709



115,769



84,204


Professional services and other

18,786



16,364



59,390



55,524


Total cost of revenue

61,964



45,073



175,159



139,728


Gross profit

187,538



133,312



523,917



361,509


Operating expenses:








Sales and marketing

149,231



117,051



430,053



411,915


Research and development

48,758



38,404



133,458



143,047


General and administrative

33,546



36,274



111,562



170,242


Total operating expenses

231,535



191,729



675,073



725,204


Loss from operations

(43,997)



(58,417)



(151,156)



(363,695)


Interest expense

(7,364)



(3,503)



(21,793)



(3,743)


Interest income and other income, net

5,801



3,395



15,549



4,165


Loss before provision for (benefit from) income taxes

(45,560)



(58,525)



(157,400)



(363,273)


Provision for (benefit from) income taxes

1,038



(5,712)



3,552



(3,059)


Net loss

$

(46,598)



$

(52,813)



$

(160,952)



$

(360,214)


Net loss per share attributable to common stockholders, basic and diluted

$

(0.26)



$

(0.31)



$

(0.92)



$

(2.90)


Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

178,314



167,736



175,303



124,343










Stock-based compensation expense included in costs and expenses:








Cost of revenue—subscription

$

3,534



$

2,398



$

8,931



$

13,941


Cost of revenue—professional services

3,616



3,578



11,877



22,445


Sales and marketing

24,649



22,338



68,693



151,610


Research and development

11,679



9,919



30,959



64,546


General and administrative

9,258



13,515



30,339



109,165


 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands)

October 31, 2019


January 31, 2019

Assets




Current assets




Cash and cash equivalents

$

197,697



$

517,811


Investments—current

456,080



251,203


Restricted cash

414



367


Accounts receivable

159,464



174,548


Contract assets—current

17,921



10,616


Prepaid expense and other current assets

37,814



29,976


Total current assets

869,390



984,521


Investments—noncurrent

257,783



164,220


Property and equipment, net

105,917



75,832


Operating lease right-of-use assets

136,627




Goodwill

195,024



195,225


Intangible assets, net

60,759



74,203


Deferred contract acquisition costs—noncurrent

136,248



112,583


Other assets—noncurrent

24,617



8,833


Total assets

$

1,786,365



$

1,615,417


Liabilities and Stockholders' Equity




Current liabilities




Accounts payable

$

29,099



$

19,590


Accrued expenses

33,094



21,755


Accrued compensation

70,860



77,553


Contract liabilities—current

423,742



381,060


Operating lease liabilities—current

18,743




Deferred rent—current



2,452


Other liabilities—current

12,956



13,903


Total current liabilities

588,494



516,313


Convertible senior notes, net

458,578



438,932


Contract liabilities—noncurrent

9,339



7,712


Operating lease liabilities—noncurrent

150,362




Deferred rent—noncurrent



24,195


Deferred tax liability—noncurrent

4,275



4,207


Other liabilities—noncurrent

5,955



9,696


Total liabilities

1,217,003



1,001,055


Stockholders' equity




Common stock

18



17


Additional paid-in capital

1,660,313



1,545,088


Accumulated other comprehensive loss

(1,191)



(1,965)


Accumulated deficit

(1,089,778)



(928,778)


Total stockholders' equity

569,362



614,362


Total liabilities and stockholders' equity

$

1,786,365



$

1,615,417


 

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended
October 31,


Nine Months Ended
October 31,

(in thousands)

2019


2018


2019


2018

Cash flows from operating activities:








Net loss

$

(46,598)



$

(52,813)



$

(160,952)



$

(360,214)


Adjustments to reconcile net loss to net cash used in operating activities








Depreciation and amortization

12,655



10,343



36,916



26,024


Amortization of deferred contract acquisition and fulfillment costs

18,211



10,743



49,360



29,889


Amortization of debt discount and transaction costs

6,645



3,147



19,647



3,147


Non-cash operating lease costs

4,980





13,843




Stock-based compensation expense

52,736



51,748



150,799



361,707


Deferred income taxes

14



(7,335)



42



(7,347)


Other

229



(1,204)



(2,142)



(2,079)


Changes in operating assets and liabilities








Accounts receivable

(20,812)



(14,019)



15,084



1,366


Contract assets

(2,318)



1,625



(7,223)



2,774


Prepaid expenses and other current assets

(341)



1,023



(3,498)



(2,383)


Deferred contract acquisition and fulfillment costs

(27,899)



(22,206)



(76,338)



(52,545)


Other assets

(33)



667



926



2,002


Accounts payable

718



(956)



2,306



(5,990)


Accrued expenses

(5,203)



1,304



7,236



3,610


Accrued compensation

(9,120)



1,811



(6,693)



2,171


Contract liabilities

22,563



16,353



44,309



35,856


Operating lease liabilities

(3,688)





(10,886)




Other liabilities

(4,608)



4,030



(2,545)



3,961


Net cash provided by (used in) operating activities

(1,869)



4,261



70,191



41,949


Cash flows from investing activities:








Purchases of marketable securities

(223,048)





(753,934)




Maturities of marketable securities

216,261





460,710




Purchases of strategic investments





(15,500)




Cash paid for acquisition, net of acquired cash



(218,779)





(218,779)


Purchases of property and equipment

(12,280)



(8,576)



(42,071)



(19,096)


Net cash used in investing activities

(19,067)



(227,355)



(350,795)



(237,875)


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


Payment of tax withholding obligation on RSU settlement

(39,310)





(125,288)




Proceeds from exercise of stock options

19,815



5,047



62,263



15,365


Proceeds from employee stock purchase plan

13,309





23,872




Payment of deferred offering costs



(170)





(3,692)


Net cash provided by (used in) financing activities

(6,186)



498,070



(39,153)



1,034,171


Effect of foreign exchange on cash, cash equivalents and restricted cash

810



362



(310)



(1,181)


Net increase (decrease) in cash, cash equivalents and restricted cash

(26,312)



275,338



(320,067)



837,064


Cash, cash equivalents and restricted cash at beginning of period

224,423



819,162



518,178



257,436


Cash, cash equivalents and restricted cash at end of period

$

198,111



$

1,094,500



$

198,111



$

1,094,500


 

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)

2019


2018


2019


2018

GAAP gross profit

$

187,538



$

133,312



$

523,917



$

361,509


Add: Stock-based compensation

7,150



5,976



20,808



36,386


Add: Amortization of acquisition-related intangibles

1,348



1,632



4,356



4,303


Add: Acquisition-related expenses



108





108


Add: Employer payroll tax on employee stock transactions

715





1,908




Non-GAAP gross profit

$

196,751



$

141,028



$

550,989



$

402,306


GAAP gross margin

75

%


75

%


75

%


72

%

Non-GAAP adjustments

4

%


4

%


4

%


8

%

Non-GAAP gross margin

79

%


79

%


79

%


80

%









GAAP subscription gross profit

$

194,894



$

140,717



$

544,572



$

391,881


Add: Stock-based compensation

3,534



2,398



8,931



13,941


Add: Amortization of acquisition-related intangibles

1,348



1,632



4,356



4,303


Add: Employer payroll tax on employee stock transactions

337





769




Non-GAAP subscription gross profit

$

200,113



$

144,747



$

558,628



$

410,125


GAAP subscription gross margin

82

%


83

%


82

%


82

%

Non-GAAP adjustments

2

%


2

%


3

%


4

%

Non-GAAP subscription gross margin

84

%


85

%


85

%


86

%









GAAP professional services and other gross loss

$

(7,356)



$

(7,405)



$

(20,655)



$

(30,372)


Add: Stock-based compensation

3,616



3,578



11,877



22,445


Add: Acquisition-related expenses



108





108


Add: Employer payroll tax on employee stock transactions

378





1,139




Non-GAAP professional services and other gross loss

$

(3,362)



$

(3,719)



$

(7,639)



$

(7,819)


GAAP professional services and other gross margin

(64)

%


(83)

%


(53)

%


(121)

%

Non-GAAP adjustments

35

%


41

%


33

%


90

%

Non-GAAP professional services and other gross margin

(29)

%


(42)

%


(20)

%


(31)

%


Reconciliation of operating expenses:



Three Months Ended
October 31,


Nine Months Ended
October 31,

(in thousands)

2019


2018


2019


2018

GAAP sales and marketing

$

149,231



$

117,051



$

430,053



$

411,915


Less: Stock-based compensation

(24,649)



(22,338)



(68,693)



(151,610)


Less: Amortization of acquisition-related intangibles

(2,957)



(2,257)



(9,102)



(3,787)


Less: Acquisition-related expenses



(68)





(68)


Less: Employer payroll tax on employee stock transactions

(1,682)





(5,610)




Non-GAAP sales and marketing

$

119,943



$

92,388



$

346,648



$

256,450


GAAP sales and marketing as a percentage of revenue

60

%


66

%


62

%


82

%

Non-GAAP sales and marketing as a percentage of revenue

48

%


52

%


50

%


51

%









GAAP research and development

$

48,758



$

38,404



$

133,458



$

143,047


Less: Stock-based compensation

(11,679)



(9,919)



(30,959)



(64,546)


Less: Acquisition-related expenses



(302)





(302)


Less: Employer payroll tax on employee stock transactions

(712)





(2,888)




Non-GAAP research and development

$

36,367



$

28,183



$

99,611



$

78,199


GAAP research and development as a percentage of revenue

20

%


22

%


19

%


29

%

Non-GAAP research and development as a percentage of revenue

15

%


16

%


14

%


16

%









GAAP general and administrative

$

33,546



$

36,274



$

111,562



$

170,242


Less: Stock-based compensation

(9,258)



(13,515)



(30,339)



(109,165)


Less: Acquisition-related expenses



(1,290)





(1,290)


Less: Employer payroll tax on employee stock transactions

(735)





(3,057)




Non-GAAP general and administrative

$

23,553



$

21,469



$

78,166



$

59,787


GAAP general and administrative as a percentage of revenue

13

%


20

%


16

%


34

%

Non-GAAP general and administrative as a percentage of revenue

9

%


12

%


11

%


12

%


Reconciliation of income (loss) from operations and operating margin:




Three Months Ended

October 31,


Nine Months Ended
October 31,

(in thousands)

2019


2018


2019


2018

GAAP operating loss

$

(43,997)



$

(58,417)



$

(151,156)



$

(363,695)


Add: Stock-based compensation

52,736



51,748



150,799



361,707


Add: Amortization of acquisition-related intangibles

4,305



3,889



13,458



8,090


Add: Acquisition-related expenses



1,768





1,768


Add: Employer payroll tax on employee stock transactions

3,844





13,463




Non-GAAP operating income (loss)

$

16,888



$

(1,012)



$

26,564



$

7,870


GAAP operating margin

(18)

%


(33)

%


(22)

%


(73)

%

Non-GAAP adjustments

25

%


32

%


26

%


75

%

Non-GAAP operating margin

7

%


(1)

%


4

%


2

%


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)

2019


2018


2019


2018

GAAP net loss

$

(46,598)



$

(52,813)



$

(160,952)



$

(360,214)


Add: Stock-based compensation

52,736



51,748



150,799



361,707


Add: Amortization of acquisition-related intangibles

4,305



3,889



13,458



8,090


Add: Acquisition-related expenses



1,839





1,839


Add: Employer payroll tax on employee stock transactions

3,844





13,463




Add: Amortization of debt discount and issuance costs

6,645



3,147



19,647



3,147


Less: Tax benefit from SpringCM acquisition(1)



(7,369)





(7,369)


Non-GAAP net income

$

20,932



$

441



$

36,415



$

7,200










Numerator:








Non-GAAP net income

$

20,932



$

441



$

36,415



$

7,200


Less: Preferred stock accretion







(353)


Less: Net income allocated to participating securities







(1,427)


Non-GAAP net income attributable to common stockholders

$

20,932



$

441



$

36,415



$

5,420










Denominator:








Weighted-average common shares outstanding, basic

178,314



167,736



175,303



124,343


Effect of dilutive securities

12,478



24,490



14,503



24,554


Non-GAAP weighted-average common shares outstanding, diluted

190,792



192,226



189,806



148,897










GAAP net loss per share, basic and diluted

$

(0.26)



$

(0.31)



$

(0.92)



$

(2.90)


Non-GAAP net income per share, basic

0.12



0.00



0.21



0.04


Non-GAAP net income per share, diluted

0.11



0.00



0.19



0.04


(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)

2019


2018


2019


2018

Net cash provided by (used in) operating activities

$

(1,869)



$

4,261



$

70,191



$

41,949


Less: Purchase of property and equipment

(12,280)



(8,576)



(42,071)



(19,096)


Non-GAAP free cash flow

$

(14,149)



$

(4,315)



$

28,120



$

22,853


Net cash used in investing activities

$

(19,067)



$

(227,355)



$

(350,795)



$

(237,875)


Net cash provided by (used in) financing activities

$

(6,186)



$

498,070



$

(39,153)



$

1,034,171



Computation of billings:



Three Months Ended
October 31,


Nine Months Ended
October 31,

(in thousands)

2019


2018


2019


2018

Revenue

$

249,502



$

178,385



$

699,076



$

501,237


Add: Contract liabilities and refund liability, end of period

435,898



330,060



435,898



330,060


Less: Contract liabilities and refund liability, beginning of period

(412,953)



(300,426)



(390,887)



(282,943)


Add: Contract assets and unbilled accounts receivable, beginning of period

17,757



16,196



13,436



16,899


Less: Contract assets and unbilled accounts receivable, end of period

(20,805)



(15,229)



(20,805)



(15,229)


Less: Contract liabilities and refund liability contributed by the acquisition of SpringCM



(11,002)





(11,002)


Non-GAAP billings

$

269,399



$

197,984



$

736,718



$

539,022


 

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SOURCE DocuSign, Inc.

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