DOCU - Earnings call transcript Q4 2020

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Operator

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Fourth Quarter and Fiscal 2020 Earnings Conference Call.

As a reminder, this conference is being recorded and will be available for replay from the Investor Relations section of the website following the call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Instructions] [Operator

pass Please to go now of Leschin, call Relations. Investor ahead. the will Anne over Head I

Anne Leschin

Thank you, operator. fourth quarter Good afternoon, everyone. fiscal earnings Welcome XXXX conference call. and to DocuSign's

Dan today, Relations have The call website. release fourth today issued our results announcing CFO, on and the On is press DocuSign CEO, posted Mike Springer we Sheridan. was earlier quarter and our Investor

related everyone today's our and me that remind subject that these expectations call assumptions materially results actual forward-looking, let our are on cause performance some may are Now, statements unknown statements to different. believe are we and they uncertainties reasonable, be to forward-looking of our or risks but and known to

the statements the Any date, update Please law, this in assume call. based SEC are and of by we read and obligation new or consider filings no with except risk and content expectations forward-looking the information. our factors on light events to assumptions in required of to future statements as with these our

our other will call, debt compensation stock-based and measures. financial financial Non-GAAP acquired this and costs non-GAAP applicable present exclude During amortization issuance from and assets, as amortization measures of discount special intangible of items. expenses, GAAP notes we

our in non-GAAP considered addition, results. isolation billings. free We cash from our These measures performance. count substitute In flows GAAP provide when weighted be consider and all or we or and intended encourage not non-GAAP share average information to superior to analyzing regarding you measures to for are

which of to comparable quantitative information website again our measures regarding directly those today's can and please on found reconciliation non-GAAP investors.docusign.com. our information figures, For be at refer GAAP press release, most a and

Dan? over to turn like now call to I'd Dan. the

Dan Springer

to Thanks Anne. earnings Good call. everyone, fiscal XXXX welcome our fourth and and quarter afternoon,

as intention XXXX. acquire about share in And today. Seal recently you announced we'll look year. entire quarter for performance the our to cover to focus as our a talk more fiscal have We'll detail for our ahead the to lot well fiscal We with We'll Software. areas

to acknowledge the evolving wanted But coronavirus. take by we the I the a get to before that, situation COVID-XX, caused disease with moment and

few taken ongoing to our safety Over their our as steps our employees been ensure monitor We've and developments. past weeks, families meeting team as the several well-being to partners. the daily customers the of has and and well

our our we've annual Conference North to global Customer event into taken move workforce our end the environment stream Momentum this of entirely live transforming an and week. include; a as decision America Actions held of last virtual to week; remote

we We the to update and will plans monitor situation as continue our learn accordingly. more, we'll

said, as With a over to ago on It Agreement that was we Cloud. performance XX DocuSign year our second that our just business months the company. public let's introduced move

automate is; help the integrations organizations of signing, those on Our managing and that preparing, agreement and that process suite acting applications entire agreements.

We with see like agreements cloud service, software the and sales, HR increasingly finance. suites integrated marketing,

act belief and Our for organizations be to record clouds. other Cloud an platform of the Agreement which need that connected will as to agreements agreement will a processes, is

for system CRM sales offer letters contracts. HR system For the or example, integrating with the for

this represents cloud said, have the we As big believe we opportunity. next

of five I'd Over especially offerings shipped service stage process. named to and every cycle broadened November of the we for just the year, we management. XXXX cover it in last SpringCM. this our of by was leader And call life fiscal year out XXXX, DocuSign acquisition the Magic our contract And past in fiscal as in a to Gartner have the agreement builds on Quadrant products CLM. Launched product like new that

recognition. We are very proud of this

a seen you. in share few work our financial I this all which of with want impact positive of be results, The can to

were We on by grew year-over-year DocuSign's flow. million grew $XXX cash QX, continue XX% positive revenue to $XXX billings million. basis and and a profitable for year-over-year again generate to non-GAAP we XX% Now to

Our count came XXX,XXX in retention worldwide approximately at dollar rate and XXX%. net our climbed to total customer

to For our the effort. I for full XX% and of billion. entire incredibly am fiscal year, proud team the our revenue $X.X to DocuSign $XXX grew grew this XX% billings collective million

of But going there. not we're course to stop

it we can can define category, can collections This and agreements Agreement increasingly As continue contract risk business our that grow extract, by we customers. of Cloud areas search analytics an important intelligence by will role. keywords. of large terms contract the just compare and concept artificial rather automatically and and opportunity even It to legal technology for than analyze identify know play rapidly and

we space be in acquiring to excited be So the this pioneer more couldn't Seal Software.

you we them where the Seal's our work And wanted as with fully broader flagship strategic DocuSign. million into in a Insights. with its and of of in we Intelligent offering March began the company year. many customers, two we know Having Seal as ago reselling bring a DocuSign $XX last marketplace, made we as also about seen partnership at investment aboard people technology formed As in to well years

company examples. something manual they across business if To few reviews information give review on share done months One could me points just spent in days, And more customer let X.X you to services legal of more company the than than XX%. And that automated agreement. by international million analysis fashion. agreements services a global able taken large reduced color financial the have a supplier a little more aviation company data the was its XX,XXX time in few a contractual an traditional

acquisition and we And range a the over immediate new Seal's CLM we time opportunity given enhance will for apply AI also with existing the Cloud. AI flagship Agreement workflows Seal's there. to Once of We'll selling expect start to We'll product. market products. across across our integrate to continue this able entire closes, contract Seal's technology analytics technology be broad

extend Now these work showed our conference and some AI, which we Momentum developments at in other week. of will complement our last

fields. It for uses to AI Normally be done is place to document in demoed the when manually this signature. for needs tags feature something that other eSignature. example, dates we auto-tagging. new preparing a For and It's automatically a signatures,

wow a for huge it and auto-tagging automatically With users. is factor happen can it our immediately and

also demoed Analyzer. and analyze of risk Agreement We AI inbound clauses. actions uses of the It product its agreements under various to based Seal's content development triggering identifying on called areas a

area believe of meets this incredibly we So, agreements is whole AI exciting.

While the nascent today represents as it a greenfield future competitive deepening well opportunity our as key of for a moat.

quarter. our We closes the will keep second acquisition updated Seal you once in

results, billion For look the have last major milestone, cusp lies a how the stone our we elite it's This comments thinking $X exciting future crossed today, Based joining XXXX is part that future group are also of to on revenue business. about I an threshold. companies my want the fiscal are to on we of SaaS a but our stepping just and that the scaling ahead. of the to

be billion first next eSignature also Our billion $X Cloud. built broader continue the expansion by eSignature. in Agreement opportunities was but $X will on the rest for The the substantially largely our boosted leadership of

to To Cloud fiscal operate that processes, has of three intersection and happen Agreement shown make the continue well. which customer business priorities. on and agreement the we at demand our working we'll and executing One, vision world's ensure strategy on key XXXX strategic is focus

success we customer breed do. the everything around and live world Two, in that

to SI that our customer to Agreement of ISV partners Cloud partner XXX are our practices also both success. building drive we'll network our leverage that amazing partners our continue joint As growing part and

Both a ensure DocuSign the top our I And we talent to three, level. to point, our work attract we that that new Giglio that can drive as Olrich. share place Rob our recently be the and will that next as to remains our Darwin so can retain Eric Chief Corporate to appointed scale Development. we And COO, to of reporting wanted and Officer; Marketing Scott Head

from he corporate helped the business us where to led the Rob comes oversaw company's development team LinkedIn growth strategy cloud international and architect for expansion. there. he to from the Eric self-service where us significant joins Adobe,

we may considerable Emily last you and at Airlines benefiting Heath as formerly Security the our and we Chief In our are addition CISO from Trust Officer United experience. of October named that was Emily already in year. recall

of Agreement call. prospects agreement around for and So, transform incredibly and fiscal I'm the company about XXXX proud progress the Cloud's fiscal agreements that's we and XXXX section today's in processes I'm beyond. excited as in made world the it my a to of

that it look over deeper hand our a Mike financials. to year like at with for Mike? to fiscal I'd QX So, and our

Mike Sheridan

everyone. afternoon good and Dan Thanks

Agreement mentioned, core DocuSign had saw we fiscal a Dan very offerings eSignature in broader suite. XXXX upsells As our interest Cloud in which customers in our successful strong for increasing growth among our and continued

total representing XX% a the year-over-year. reached million, revenue $XXX reached both $XXX revenue subscription quarter, fourth and million increase For

subscription the million year, revenue XX% revenue increased For total million. increased $XXX to and XX% to $XXX full

Fourth year. $XXX billings to year-over-year full XX% quarter to year-over-year for International year the $XX quarter XX% the $X.X million the million revenue XX% million and in billings billion. continued $XXX to to grow for and increased rose over

new quarter customers. installed and about the XXX,XXX We including and customers customers. X,XXX are of in added brings in enterprise XX,XXX nearly year-over-year represents fiscal to XX% approximately which commercial our This total a base our increase customers XXXX XX,XXX almost direct direct

another our installed of American We led quarter base business. strong had upsells by into our North

ACV XX% This than quarter $XXX,XXX customers. year-over-year XXX%. retention Customers with our greater of a is grew XXX was net to dollar total

with ago. margin quarter compared for fourth year the gross a XX% Non-GAAP was XX%

with subscription For in was with compared quarter Fourth also the XX% XX% was year, XX% XX% year compared margin ago. gross a XXXX. full fiscal margin gross

margin was gross XX% with fiscal also XX% the XXXX. year, compared For subscription full in

expenses $XXX revenue last for fourth year. XX% revenue operating or with totaled XX% quarter of million of the million for Non-GAAP the total or compared quarter total of $XXX

compared million or expenses operating revenue revenue year, full XXXX. the $XXX For $XXX fiscal million XX% XX% with or of of were in

X% Non-GAAP with was or margin $XX compared year. a operating million profit last or operating X% an QX margin million $X for operating

margin improving operating as continue X% operating For was progress to full our fiscal up XXXX we make on the X% from leverage. year, in

million Non-GAAP was $XX net last compared with income year. $XX for QX million

a fiscal year, full year the from $XX XXXX. the year-over-year million million, We For with $XX up employees ended of in was X,XXX XX%. net increase income

This of the we in dedicated year. compared flow to on in the ago. expect the of quarter our to which half same build-out federal the relates complete compared center complete million continued in increased Operating the year-over-year investments to to work decrease prior data in was our first to million capital office cash $XX XXXX. fiscal the year flow quarter $XX quarter a million $XX in $XX our cash in million QX to and Dublin XX% fourth Free

$XXX $XX year, million to in increased free compared while the fiscal XX% to cash For $XX $XX million was flow compared ago, full cash year year-over-year flow operating XXXX. to a million million

we Software. Turning you our announced our to as know, intent recently guidance, acquire to Seal

discuss contributions topline partnership we I'm than Seal this expect in The do Seal. expect other generate not with close include our about to ranges QX. fiscal to acquisition existing We guidance contributions from from to

after Seal of be significantly acquisition from will contributions DocuSign, including so will bottom-line. closes. Seal Seal than the top the is or We our guidance to impact our update to include smaller not significant

to In revenue terms subscription of QX we to billion of for fiscal guidance, $X.XX million topline XXXX. in and $XXX million $X.XXX $XXX billion expect

to $X.XXX XXXX. We $X.XXX million expect of in total $XXX QX revenue billion billion to $XXX fiscal and for million

because in and different subscription guided of separately components growth have total I revenue. these revenues we rates anticipate

believe professional fiscal we year-over-year our in engagements reduce will more we This on that integrators in we the projects services more Specifically, to in of will take Cloud. successful rate development involve and from revenue. engaging our have growth XXXX multiple system products other Agreement as be that service our positive professional

for $X.XX million billion remainder and the in of XXXX. billings to anticipate fiscal $XXX million we of guidance, to For QX billion our $X.XX $XXX

expect margin both be We fiscal to XX% XXXX. non-GAAP and for QX XX% gross to

of marketing the expenses, in XX% revenue R&D to operating range sales QX XX% expect for range QX G&A of revenues for of in we to and For X% in XX% of fiscal XXXX. fiscal and revenue fiscal and XX% XX% of the XXXX. in finally, And range QX to XXXX. and of the

million to expect and -- we For $X income. non-GAAP $XX XXXX, interest and quarter, the other non-operating non-operating non-GAAP and of fiscal to of interest $X million. And first $X for we million other expect income million

fiscal XXXX. approximately QX $X of to $X.X to $XX million million expect provision $X.X tax for million for We a million and

shares Finally, outstanding fiscal Overall, and of for to shares outstanding year fully weighted diluted QX XXX million expect XXX we average XXXX was for million fiscal DocuSign. XXXX. another

at fiscal As we the our excited continue to we we partners are as interest customers seeing from begin broaden our Agreement we XXXX. are and Cloud,

we up today. us And the for will joining now Q&A. call open for Thanks

Operator

comes first JPMorgan. with Thank you. ahead. Sterling Our Please question Instructions] go Auty [Operator from

Sterling Auty

maybe especially, us lot you're give volumes? market wonder Yeah. maybe Hi remote you color seeing to what I Thanks. you're refinance working strength as real sales guys. And if can that seeing with what's what maybe the weakness. a some more we're maybe as areas estate remote seeing increased we're happening engagements seeing industries some given little a in

Dan Springer

Yes.

to Financial is as our seen see be answer the we good traditional particular telecom From think for in anything your different. services well. strong a is question, with estate lot real I has know We places. time, estate, on in to activity of rates change in strength when continued our us. the So But we real in focused strength haven't selling volume I keep anything. it's on And haven't this there. seen much more might transactions refinancing. versus start interest lower about point talk homes often at buying and we mind,

change and this a lift, think refinancing new additional could spur in from it. we I would noticeable would dramatically at different some but and I So seen have environment suppose rate interest wouldn't point. purchases general, change any it haven't sales that

Sterling Auty

the your for are the What follow-up installed natural that solution Seal. the would upsell base acquisition already right. on of adopted? not existing you And All think then of perhaps have targets Great. portion one just

Dan Springer

to Well two you think I have pieces. at look

focus allows to I our that mentioned we've software entire larger and have taking available customers. technology that's a doing to opportunity on pieces analyze Seal the way excited think with all Agreement that and traditional as heavier people would enterprise there's have to. is think up towards make going we smaller product well. what AI take You opportunity we which the our going think incoming here the spread to I would I and coded an some at this particularly call, And the to to of But to more Seal our been commercial enterprises. for an and offering be really look and agreements referred into as more across be customers really about Analyzer used to now, was that be that to That idea the small businesses that

segments. going but appropriate for be it's be aspects different broadly to think we of it based, customer So to going different are

Sterling Auty

guys. Thanks

Operator

Thank you.

Our next with question go Please comes Evercore. ahead. from Kirk Materne

Kirk Materne

much. on congrats Thanks the Yes. year. very really of And end nice a

it I I this did billings Just the around have slippage? of if just I little I a year. know and know differently coverage we're anything missed if you thought into that's for sort prepared about in year. just Dan digesting with was opportunity that? of time. in you to do pipeline virtually that kind I thought in COVID two had deal curious of then around is of conversations it just Thanks. maybe new quick ones. a all your And anything of sort how this like your with XQ, kind terms really real about you But sorry Mike, you Momentum bit you for And be consideration when but take fluid in the But this GSIs I think was going? also commentary, curious maybe guide sort if and this of could

Mike Sheridan

Yes.

been methodologies that our developed used year, guidance has in guide the starting really So the of in we've with for QX fiscal the past. for and all same

watching with any rates. We opportunities. COVID. to look our our changes do look our developments to we And Of that information. at close trends. generate at pipeline. ability do material of any very at closely look all We We seen that our look yet We not course, have in date we're at

I and summarized. to we're I we year information But more the have with than Of it the the that in course, that unfolds together. think incorporated that as into we've that the have learning be we've going all all near-term we guidance just had visibility we're comfortable

Dan Springer

think expectation the The that I'll fact out the event, And Yes. that it things: to he we've we virtual from important would some just one projects in while sort about so presented and point amount we participate I'll the professional there's integrators customers actually including GSI. that most cat. systems beginning. have. Mike said had back coming of we did to I'll our we do if and guidance from three, the demand much services to growth last point what gave question partners Two, a you our the to take virtual And of referred us that believe it our make came the you who around mention first and is Accenture you did point on the we of in with three still Momentum these changed

As the build Agreement Cloud builds practice. Cloud out components, systems just opportunity with richer it and for richer more Agreement the becomes to a an integrators

with those exciting three all of really we opportunity to GSI. some So see contributed the things

Operator

question next comes Walter Please go Our with from Pritchard Citi. ahead.

Matt Wells

actually and Wells growth that expansion of here. just on you for domestic? top of XXXX then was net curious, the and growth Matt Walter order rank just for and I versus is in international drivers could This adds? expectations And between growth Dan customer if on just maybe your And fiscal

Dan Springer

any this given phenomenon if to your it's the the think period, first past. because the revenue through net because going base the have model is about I – new. you in from SaaS So we to of pretty installed Mike revenue piece we as standpoint, in separation base that know But dramatically more is broad-based. From a a think I the the you base thought was question walked come from the around all

of you a range if our end up net dollar take row rate, at couple at in strength a a there, see the a XXX%. of look higher we're retention from of But pleased at the standpoint that quarters to

strength We motion. continue our with lot to of see expansion a

the in that the or quite versus dedicated of hunter did were we that with versus and land farmer splitting At started that focused on focus success we hunter pleased we're expand mention we're more putting on same model. groups time seeing the part out

if the just it course base base. of volume, of growth because one – the would put say, and put don't to I to I the the I I'll So of had

And add customers. more is grow position to eSignature, I'd with even then our really that to in the I base because last of gas more now incredible top our in we Agreement gives tank thing Cloud to the existing are leadership just on us that produce products sort starting of think

Matt Wells

one style, same ahead. is pedal The one, go

Dan Springer

No I geographically. because that because just board of it's past say North business driver a our America We've want we to mentioned the across strength the think see share. in and it's lion's I the

there markets. to great on see in the opportunities strength see continue top We we of international

Matt Wells

a have I That's helpful. COVID. related to And question

DocuSign most in that web You of when having how work the I'm to remote site? entirely noted them implementing or of customer, be much over a that on workforce curious software just your is remote. can versus done go actually

Dan Springer

to Yes. I are where mean only think you person have customers, that majority us it's example if have actually course, to done – have they in so of board. our about perfect Not speak. don't don't they do remote. web need implementations of the and the to speak never vast our to mobile And they us of our to

completely when the on we that here we'll the it. And of larger do customers have premises. the past some period new with not But do then the way may their X in our of opportunity installation over be in of We remotely. the get they doing it is enterprise that time consider to had of find some done more next business of value more

in you all and continuity terms maintaining we moved of I've how now I have pleased a of of have our as been our this so programs we've productivity our remote, model business the to not beat the having missed all worked can team. of employees tell

do that need installation hopeful remotely customers those impact we'll well. with work to projects we as I'm positive able have as our to if So we be same

Matt Wells

for That’s color. me. helpful Thanks. Really it

Operator

RBC. go from comes question Next Please ahead. Zukin with Alex

Alex Zukin

how current generating for maybe for kind question. respect of close that my With one not to of mentioned a given the you the delay quick confidence the change just closing I change do And guess point? you then guess I you. virtual? to closing mean, generation pipeline for sale follow-up. the at a Momentum, much went just Hey, But to pipeline I Mike or anecdotally the – methodology what guidance you? is guys. current no a or you to guess Dan given expect Thanks event And the methodology. taking just guidance what events event I gives

Dan Springer

first. Okay I'll go

for So totality in it's is but a is piece. a – small us our it super event Momentum efforts marketing very important of

I'll metrics that's things the thrilled interesting the of on give virtual, it. high you the we One you level give a just a moving to about event couple with to perspective results. were

would expect we'd event the five move Normally, be be from it maybe basically participate. had we times of XXXX, people we XXXX number When would that to people virtual, San Francisco here great. and

So absolute number also increase. that we event. last was in-person a leads saw big there we of had a generated And than higher year's

rethinking I found because equal all is our way we next customers. But as that there is virtual to in person small going businesses, plans can't this thinking to so some we reach versus we had a start we're our year about of us for how opportunities Now more for actually events. difference mix mix say And a were we fantastic our are do size.

out came me or of a nothing going of business. be that for to Momentum thinking our that was this elongation there's slowing year an So

Mike Sheridan

terms mentioned we We've more a Yes will pricing we're Clearly of lot guidance, of looking Gen work as I work is at we our trends. tracking close and before, And trends. the philosophy know. going QX. a our have information, think around remains of example the what at same have lot better our finality for current in which trends, looking we done guide demand the the basic rates done our to the I

of through We on now that periods. the QX. have halfway inform closer us all roughly information we're And right to

useful that's So information.

to operationally, as we ability to all date information productive. future terms execute to our against of into that out guess And I our resources and everybody have together look missed Dan you as we're we I putting a really not be execute of think position same in put execution. don't against quarters to beat that and said else. we're plan second the in again As have the

than like quarters gives more would different clarity guidance. now course felt and to in it. premature be more do guesswork update would than we information future so with us of be about will that we If to something But the available that us develops something frankly

Alex Zukin

Understood. move kind And risk hiring or seeing to would any in more is your there I respect just around you it hire say just of on remote? fully hire What now remote are of a maybe as the need trends need that reps engineers right And follow-up to hiring. as quick you with you to moves volume you as department?

Dan Springer

made we tell expectations Yes not plans earlier day any in you one or XX changes DocuSigners our where we have for this onboarded hiring. can new And I had we remotely. week

have we has virtual bringing into So out these our fantastic in figured appreciate team a really it you actually building capabilities approaches. job up done I just and

And of the we classes. what we moved lot stream multi-day from of what up a was should was – probably a a mentioned upfront did was Momentum it our hour going when online followed managed best to have be example by I into upfront conference event couple

continue just these team and said, work DocuSign that our mobilized, a going and this going do we're be I'm with virtual And make confident that to has able in are our hiring. things the to forward team year scale to we business to environment.

Alex Zukin

guys. Perfect. Thank you

Operator

Bank. from Next Keirstead with ahead. Please comes go Karl Deutsche question

Karl Keirstead

Thank question a on you. Mike, margins.

operating evidently margin. call over on fiscal operating in should agree good can have not I But going time. in to think everybody the for kick really X% leverage DocuSign XXXX pretty your given that's guidance that

questions short three this on ones. had I So

then bit in there prospect any bit leg a operating those little to that what is margins about XXXX a that operating you First in on weighing get path the a you. time priorities X% for fiscal Seal that Thank might be down of the when are close XX-plus we all, there IPO? of is that margins? get to investment change do you percent talked the a at to DocuSign guide? of third, And the Secondly,

Mike Sheridan

Karl. Thanks Yes.

of guide for So of a think One, depending And we year, mid lower growth profile a my guidance during for or choose within the range is didn't that the could investment upon where range fiscal percentage a couple I actually we things. end operating that be at the higher margin. that. I

think wouldn't a percentage. would I single that. to So ranges call guidance the want I out don't support

I of level you that would continue to a in if look is to At and tell in period time the being highest ourselves continue as see our invest performance, at what to high-growth we're that. we going you

been I expect leverage key the demonstrating balance we It investments including XXXX want drive could progress We faster? is and to XXXX. line we some probably the We that continue fiscal make continued that in of could grow The what bottom that adopt. in fiscal continue have that could. in sub-optimize would is to growth. And to we to

mentioned are that What is investing Seal lot those had a a going R&D. line, of as would it's to in investments? is or I call smaller I a it's business do bottom roll impact them. we one think When top I numbers, don't out have Seal our but into dramatic on our

impact of Those we're exchange will that, provides to long-term. on And us bottom opportunity continue kinds the to line decisions that are have of of going it the to so make. growth that some for that but dilution some the

of model I XX% we're to that going that. towards think Again, our that in that. terms In the I to XX% line And we operating flow cash balance. continue to continue find endeavor that fiscal good terms are long-term towards of track both XXXX growth tracking and the evidence in to is right leverage, we our of bottom think to

right the clear right think priority to we is believe it, to everybody continue drive continue -- for now with pretty to so that responsible much on I do is but we're leverage. us target growth with

Karl Keirstead

cash important least getting flow, to really valued but follow-up a maybe your flow. Mike still then think at is I model on And correctly. it. on Got operating don't stock cash as near-term it's

margins fiscal will starting to percent? XXX investment did a similar bps that Is margins or model flow cash And if operating point? reasonable modestly So XX-ish you XXXX up a in of up XXXX, XX%. operating cash priorities a mentioned flow decent given be you XXX the Is to bps margins starting it so. operating point fiscal

Mike Sheridan

specifically, Karl P&L flow but use I margins your cash cash to that's model. at flow, if with think look the operating our the the you proxy guide relationship that don't our we Well, build of I you think as best historical do

Karl Keirstead

Got it.

helpful, the terrific and billings congrats That's very Okay. on guidance.

Mike Sheridan

Thanks.

Operator

Next D.A. question ahead. comes from Rishi Davidson. go with Please

Hannah Rudoff

for Hi. Rishi my Thank on today. Rudoff Hannah This is question. actually you taking for

and seen them know negotiate no impact COVID. can and is the find bans? from I will travel to expect deals so material you making thinking to you that talk trends deals and on But haven't close changes traveling so So see you from DocuSign said you you great. businesses COVID-related business to be the provide any to in adoption one could far the about if So I'm color more on to

Dan Springer

Yes.

I we've from a have and the anything took there said all of can brought guidance standpoint Mike about I that there's we visibility don't would we And provided, as we that be that, the to seen a think bear. change. latest think to information

Whether And make transformation question the to then it's mildly this think Look, I the we some going to there's tragedy longer-term around around, your a that occur. part how suppose companies episodes coronavirus digital of that? we possible. that's like second think phenomenon about impact? accelerate

of or this on the to one to important rid pandemic. that's think are that processes, be companies hard better a on don't themselves and dramatically We is way hard do another think which and long-term getting the trend customers moved trend way paper-based by are the there's on realizing, We it's going hard their environment. business

So we this us the perspective change it's -- our timing. on leading have at point not

Mike Sheridan

to around your travel. would And specific I question add

our commercial I motion we from go-to-market sales. think is commercial enterprise e-commerce. inside one to and between large about and is structure, in Through have our largely thing remember everything

Many side to of us, of going do lot of the our is enterprise in So of same well. together thing figuring the out remember that's do things. other reformers through Zoom like are through customers travel go-to-market working have with and through because that. a there as they're our that sales inside we But work how techniques

Hannah Rudoff

thinking you then about the about we Okay. of That's year? how super subscription gross talk course Great. And be helpful. could the across margins should

Mike Sheridan

seen we've similar trend years of be put think a Yes prior total most what I the in I recently subscription margins think I and XXXX. guidance that fiscal should and gross to

Hannah Rudoff

All right. Thank you.

Operator

with from JMP Please ahead. comes Pat question Securities. Walravens Next go

Pat Walravens

applaud all, making early conference of and home say, from having that first harder make know work is now. And in it actions everyone you you. it virtual you keep I let safe. of than when to terms was made me everyone guys' Thank Great. I decision And the

Dan my starting and the we I So little remotely? up guess, everyone week kind first as basically you hit question expect DocuSign but bit, usage start going is would to is to of this of this work a

Dan Springer

the pleased expect people that use don't dramatically dramatic have We change of that think the option. in to have any DocuSign they we unchanged. cases they'll We usage. think be as be sort will So have that

Pat Walravens

Yes.

Dan Springer

The thing sort point, dramatic at usage. change in financial impact, would have I not an from mention buy dramatic usage have any probably this short-term capacity. a don't standpoint, change a wouldn't really in a overage But only remember of we're model. because expecting is that we People also

some that were there and have the big in past, As if a impact walked through short-term Mike so see probably our fluctuations wouldn't financials we anyway. on has everyone

Pat Walravens

Okay.

people And happens the more they so next? licensed than if what capacity use

Dan Springer

their if usually get with them level. cycle, renewal mean, they have dramatic they it your upsell have They ROI. we say, it the have then would We grown. their of wait. we increase, motion, fantastic. their just then high chat capacity like great, going we consider to needs to I appropriate the But even it's a and we too because they And forward. when looks great When got consider with next business an about do cycle, That's might

Pat Walravens

Okay, for Mike, maybe great. is this you. then, And

the So the that in I finished, months next is so. Why important? be guess, center or is three going data to federal

Mike Sheridan

everybody want long we production that think, to that work today, production to with first important sure for have make actually I think, in It's where we out do I'd off, we knows Well, it. term, it's today. are do to customers -- that in build complete active I to the But vertical.

right but FedRAMP the Pat, of those require the data has a ago, them. getting through of qualify to efforts. starting been in of to most certifications our place percentage approach not a of all them, of it couple center, federal percentage A agencies number years our sell the to agencies private to

increase our today we're necessarily in about in XXXX talking investments aren't was I fiscal just that growth. before the investing a at growth, when targeted So making

gain It's a that provider, we're in traction does more not slowdowns positioning as longer-term that as our ourselves process. of such encountering view market the sales strongest unnecessary

vertical this make to an production those data have efforts close the So important the of both of at to to also designed really good them in be have And, yes, completion stage. fed it's been over centers. time. for us good It's coming to

Pat Walravens

Do diminishes think and then, been urgency digital of know, And strong last hard, a is this spending transformation but Great. level has a transformation in really environment. economic digital you recession? I around the all this in one

Dan Springer

getting people Yes, programs, at the the most can't are And ROI our about around from they Because, wasted transportation those I high efficiency. the I think but laser-focused I cetera. the customers, like least for et the people as speak DocuSign-centric don't. of the of get focus shipping, of cost, of see I rid rid are transformation ROI. ones getting manual labor, half incredibly And that on the processes, is of things think, all-digital course, for

focus. big a That's

gets need So I in later people you to you would recession, you don't But, to say would case on that. that any the those kind a first we in expect find I think lead significant a people time pull people when business questions some ask of that if and could had shoot stronger see think to efficiencies. delays. just back recession general,

Pat Walravens

Okay. much. you very Great. Thank

Operator

with Zlotsky question Next Stan go from Morgan Please Stanley. is ahead.

Stan Zlotsky

of and significantly like guys a getting much from product, quarter. you're America? you're on questions more your CLM so certainly benefit the consistent my one revenue Very sales to The a you congratulations very be North performance end. feels it And CLM Thank seeing that retention Perfect. of strong teams bigger from your CLM? as in drivers around correct rate characterize upsell net would quick

Dan Springer

me answer two let in that pieces. So,

big is, internal expectations our The goals. that I yes. CLM excitement your had exceeding in Gartner in our the period we mentioned question, last were piece super mentioned, around Mike first our classification. to terms of

So both I your of are question. strong think those endorsements

our ask But I question still the overall business. when the eSignature is economics, just our to remind that contributor would significantly to you largest you specifically

thought to big as as actually the not if opportunity our our upsell So overall be would CLM about you from business, eSignature.

These CLM It's we're numbers issue. and of not killing out there. are is just amazing not that large a not law it

again, scale lose So, conceptually, think, my the only everything I be But, that modifier. just that business. don't of sight we're would eSignature the with on you else, XXX% of

Stan Zlotsky

an obviously? into federal. Right. more guys around federal XXXX. should thinking thinking question Or billings, you That piggybacking And about opportunity, on a be that's maybe a opportunity type the How you. of Thank makes we fiscal fiscal from perspective just of sense. are and earlier that revenue XXXX

Dan Springer

in tempered federal and a to working the be customer, see saying is our big mean, I have customer you can think government have while tried they with of in understand to would I sometimes we're aspiration I the we've some continue we going to had what the some wins great I Yes. and wins more a know verticals. see XXXX in We as our strength. pace other we think, XXXX. be big to is not in

is even the for and it, cases one is a look wide federal Mike center internally data that unlock on we call year eyes year And agencies open to we'll use very federal opportunity big DocuSign as the as our said, at enthusiasms see we're we as will supplier. both ILX, that with I But more around friendly be of So strong another completing this us. that. think

Stan Zlotsky

you. Thank Perfect.

Operator

with Next question Please Suri Blair. Bhavan from ahead. William comes go

Kamil Mielczarek

Kamil Congratulations Mielczarek on the Suri. solid is Bhavan results. This on for Hi.

details your expand the the is product managing? into you've is at what time your term, past should all And What as in estimated $XX acting billion. $XX we TAM for? roadmap? four on some provide phases: you and Can signing, looking into of milestone be out look billion the to around Agreement with Systems So preparing, eSignature you long over line

Dan Springer

give couple that. of So, on a you let thoughts me

of First we the about opportunity. we we off, our to talk sort we analysis when that $XX the at TAM solid eSignature of feel have TAM, did billion around which continued very update time and about our really thoughtful IPO,

of talked we analysis understand rough we core the history. level strong. very a about talk the of on want We're leader about Agreement to But When I that you so Cloud, of make have sure It's very, doubling rest we the that. much and business. just clear the

of rest why an of term and Cloud, to doubling. the the estimate For it's use an the precise approximate that's of we tend less Agreement

is question Then excited in that to we're area within is Cloud, minute an the probably Stan's categories ago, which Agreement of a the phase heavily Manage CLM, the about. most

tremendous we see already, but just good progress growth have We opportunity.

also gen and that's great Dreamforce which we're last opportunity think, phase, on our at Prepare off relate launched the products, like commercial component is that it has smaller you, a but I In to products we customers. is start a which and negotiate smaller those going our CLM, year. can tell to the I to there -- a and because has dollar smaller, would business be SMBs focused in

have of not TAM the there. may that proportion it So same

it's always piece the integrated API. continuing see to increasingly for like the grow important bigger been things with it then, is and and about years, a smaller albeit, how Cloud. And phase our overall we talked and of But Act we've and a business that part that becoming of Agreement

Sign said we've have of Manage that in we're the the say, just think that as growth of I'd biggest a today. and spaces in closing, So opportunities share ones the all going are we forward.

Kamil Mielczarek

you. just which how process Seal you. change Seal quick go-to-market SpringCM, drove you temporary there Thank slightly, from impact sales sales it that Thank follow-up, much your is deceleration the closed? first Software? once see will when That's extended a or would acquired business. is Software your similar And in How a great color. some risk And initially you cycle

Dan Springer

I There When for our is been over Seal their by little. a have think force. very commercial motion an very understood that in And didn't it's We've think where were difference. little relationship selling field we I products. and very years. place, selling bought now we Spring, big was X.X we well existing

in So, expect the different independently. close I that deal businesses very integrate and that be once them. already integration between it and said, we to to products. in close, standpoint don't our second the we operate have period believe Obviously, be seamless Mike as we're in targeting the But from selling now because will a relatively that of experience their quarter. close do once I our we

Kamil Mielczarek

helpful. That’s Thanks again.

Operator

Our Wedbush Instructions] Ives Dan with go next comes Please from question ahead. [Operator Securities.

Dan Ives

obviously Great quarter volatile thanks. environment. Yes, in a

from things maybe in changing just you a if how just level -- customers and are in of with -- terms months compare least high just being strategically of just larger. more just ago, within view ago, you your to getting is six a examples of talk the conversations perspective? So can from at terms strategic deals you can are And changing give companies that your maybe, DocuSign of obviously how some year

Dan Springer

there's And you time before positive announced excited customers a you I don't just are return. deal, do ironically should two guys say, Yes. recent jointly was couple shortly actually Dan, really this obviously, the announcement is six-month just we upon to that Seal, we somewhat guys Seal, buy and there I what my dramatic get was had of large love in them. ago make of that happen I we with I the that I doing mean, just lot think responses weeks I think we've I customers. change. from think say a been Europe with frame, I'd in very a gotten

fantastic think saying, saying, was we a that Agreement their bigger partner to is different we driver just why the the we And in is think Cloud cloud strategic they're big in and eSignature people business. a are I macro this But that looking next of fact broader as is and used fantastic you believe can to be provider a at That's the now of a and which change something as success more it process, really is opportunity. companies.

change been. that's has the I think what So,

I and brought market. that think as functionality it's vision to we've the additional fairly been added the consistent

execute expect we and about So, functionality as against I'm forward I going that the to to it our excited product bringing momentum additional customers. continue

Dan Ives

use more terms private aggressive opportunity expect -- to the strategic -- are like on as Got especially more you you given build-out environment M&A would right small on view you do you lot it. further companies just I to some And customers potential obviously of maybe a just product Did the -- be different going drive of and suite? as suite. areas on what this for tuck-in just to are of M&A in especially acquisitions the just

Dan Springer

each a do who one-off I there's things team. give in to But We're business potential corporate of obviously brought lead we that have development wouldn't mentioned, used us We in a brought that. the Well, decision. still We make going as senior individual the within I leader, right pace try to didn't Eric Spring couple the wanted broad deal because, Darwin to cautious DocuSign. think moving to for successful the out LinkedIn opportunity a of were do if such we M&A. we us over was the there didn't until think we at time we to make in a building that started had sure execution after as capability we this that

when very that, made been and that. we Agreement acquire to acquiring. see for we're to We're pull DocuSign also clear strategy our Mike I drive great acquire for sake going have the Cloud. deals we didn't see with only clear So Eric of wouldn't But obviously, have the if not that the we going very

become to I under that of done I is, short and our we more gives was that next confidence deals. now could Second think integration feel And the acquisition we're thing were I But in think successful Spring. of one. going would more stop saying; machine. sort obviously an really us belt, having that Seal the we we do of some

do we're for wants think impact our can in have that out their to a meaningful Cloud customers deals solution. a really Agreement I building thoughtful that company

dramatic a this So, I expect increase velocity. in at wouldn't point

macro tuck-in like happening what's pieces behind the there's that multiple your specific point, At environment. in

some of think continuing support companies, been sort we've tech exaggerated. of the hearing the think to around I that's community, noise not I VC dramatically

for So, for phenomenon other we shopping kind forward. be some of there's don't of to spree think or going sort coming us companies

to lot of and lot community the do that. a of I in. they've And companies think dry raised invested of money to continue powder going supporting is job a they've have to do good VC a

some deals value into should build bring our for us Agreement provide DocuSign. the confidence acceleration would I customers of And maybe for in slight our continue as we fantastic said, that Cloud and more with companies can expect So same think really these do their you I to tremendous more as more we solution.

Dan Ives

Yes. time Thanks a all transparency for again Appreciate investors. insight for tough and the and it.

Operator

would to like for no turn are the comments. questions. There over floor closing further management to I

Dan Springer

thank forward much. you the we us and for you when Thank to healthy you so can in out all. see joining look We to we safe macro next and all environment. of you Well, you particularly be seeing hope Yes. all stay the light

Operator

conference. This today's concludes

thank You may participation. lines you your at this your time and for disconnect

DocuSign (DOCU) 12 Mar 202020 Q4 Earnings call transcript