DOCU - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign’s Fourth Quarter and Full Year Fiscal '21 Earnings Conference Call.

As a reminder, this call 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. now Investor call Relations. will Leschin, to I of Head Instructions] pass over the Annie [Operator Please ahead. go

Annie Leschin

Thank you, 'XX operator, DocuSign's fourth and good afternoon, and year everyone. full fiscal year earnings call. quarter conference Welcome to

Investor call earlier Cynthia The and today posted CFO, full and the Springer; fourth 'XX fiscal our announcing Gaylor. today, CEO, is press DocuSign's On Dan Relations have results and year our release website. quarter we was on issued

XXth, Both March will to and remind be Before our everyone customer be held we get I'd annual on hosting started, our like that inaugural events virtually. we conference, Momentum Analyst Day. will

and more registration Investor visit the Relations website. For you details, can

As other announcements. additional up, make events come we'll

on light new and we information. to expectations assumptions date, on of based change. We factors and forward-looking and regarding or me this be estimates COVID-XX as statements our performance obligation best related therefore, In potential risks particular, that subject together Now, with remind the actual are, SEC, the believe unknown results are statements assume no this statements to some including business, assumptions the based law, at statements everyone and required on and and or to effects but except to expectations to in of are effects future known our may subject Please expectations are they are our are subsiding the by call. of uncertainties these pandemic let of consider our and materially filings Any different. read time cause our on our reasonable, forward-looking. update today's forward-looking and these the risk our content to events the of in that our pandemic call the

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

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

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

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

Dan Springer

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

results, in year pandemic. our I it's and to want acknowledge day we operations day-to-day since almost to response to our been Before a Over the shifted that get to lives the business we disruptions that challenges, But with and life found to time, those has everyone, keep still almost ways COVID-XX amid challenges for all today. forward. created dealing work we're and moving Ones everywhere. huge people

underway, to already team, world others, to a our honored speed greater We was over of also play supporting of responded transformation efficiency allows new expanded a agreements. As signed, role and only not all trend a manual be relationship and the a accelerating digital than pandemic. it allows agreements the and surge in as as DocuSign on products they gained we with saw to we our paper-based anywhere, from act processes. transformation manage adoption prepared, This customers, people the

As recedes. paper, to going customers pandemic will a new the even back or be we expanded don't after our result, believe

will back We the was also to it don't before. believe life go way

virtual from it's anywhere. the it's medical notarized continue a work back. will only will getting will activities in-person visits But, document from total partial remotely. this and professionals and when ways to the we're think people Of doing products anything be found during pillar, home, course, better services we trend, key continue those the just years, and towards pandemic, economy’. believe option whether coming we We welcome a ‘anywhere many Ultimately, believe trend flourish, or We call the beginning. the of over supporting the or

about to in more hear we that, us weeks. the QX coming year. from around our a have share fiscal With this You'll full and lot

the cover three how QX that our to company, and about in let's partners. strong continued record parts: fiscal evolution and results; think delivers our Cloud value how Agreement the So, Our 'XX and we Cloud customers into Agreement

to total upsell rates the strong to bringing And year-over-year. milestone dollar revenue strongest XX% quarter welcomed customers, saw for driving another net year our worldwide. We we First, customers new a overall. of growth saw XX,XXX our XXX%. results. for our than growth XX% record contributing We of DocuSign yet, a to QX nearly XXX,XXX billings and was us, more expansion retention and

the digital the customers team, the DocuSign around to fiscal live. of to year. For than ever opportunity 'XX, And and in customer beyond us billion testament mark. an revenue. that's incredible reflection way fiscal with very X,XXX-person to edging are of double exited it's It's stages. By bigger that's the XX% And, addition nearly in this fiscal gone closer early still embracing the made we were possible our who've was X dedication rate a help in the any technologies transform year. year, how entire It's strong above people than world more of all its measure, 'XX $X.X by almost that to we and 'XX million they the customer work astounding our

a is this not destination. a course, Of journey,

we future goals. so going think the primary context the the as about our three of we're increasingly do continued and company, evolution in into So, Agreement to Cloud

transformation anything this seeing accelerate. best of online kinds We've click soon, DocuSign additions proofing, with to our anywhere. signing life. the made all great electronic to extend identity to want walks want to leading to eSignature the of be witnessing product agreements We to of agree notary and benefits recently digital wrap, transactions. all way we in First, remote We're

year early one alone. they For XX than U.S. the in of more And in strategy. DocuSign of as customers across response the its COVID-XX services financial example, deployed past on months cases our six part came use last board

for has took almost their average, And a powered transactions than service onboarding rapid solution today. from customer and in-branch XXX,XXX usual DocuSign as These a delivering DocuSign procurement, on went less complete far, response a crisis So to last solution a ROI. transactions business minute needs. to HR, year

cycle, our want automation to continue at of acting our signing to For And transform digitally entire Technologies. and and Seal process, every the preparing we fiscal acquisitions second agreement Software the CLM way from of stage 'XX, and and post-signature. managing. to goal, integrate expect drive innovate we Over in and to us pre to Liveoak can you all on agreement the

this time Latin for CLM an took subsidiaries agricultural they agreement to As contracts eSignature DocuSign’s just key the example, one management, process, days and time improve in solution needed a one American it With a handling of weeks. needed deployed together, reduced governance to complete and more contracts, corporate hour. and its customers than across our the XX of entire customer the matter from XX to turnaround

to Workplace including embedded processes. integrations award-winning We life an Third, have continue happen. that and with our XXX with integration, the from including where than for integrate API applications applications Teams Slack, work recent and in want we and already Microsoft custom DocuSign And with apps, more Facebook. customers' is we ensuring proprietary

to DocuSign within global of DocuSign’s has and customers with with Today, software accuracy example the DocuSign of after is could working integrated that that applications the interoperate enterprise. quickly company ensure and create workflow, signed the speed, multiple CLM can storage to other desired The team, benefits how sent its a good an systems generated accurately, with customer NDAs critical integrate productivity manufacturing and reviewed CRM, our and cloud documents One needed be efficiency it. exact and with easily. eSignature with and come all and

on that was almost my a as So, level. it's 'XX clear close, I bring to fiscal every remarks extraordinary

also DocuSign about DocuSign's that As about out to is even for thrilled we earlier. as pleased process us, It market able our economy excited I'm early understatement. to I excited uniquely well-positioned our the that modern-day for of never first I'm The course is say are its before. that's a this I during and the we I'm time. incredible to our growth more to anywhere an to invest opportunity priority being journey start as in we help And will like the there continue so scale stages, challenging prioritized, agreement points customers still pandemic performance, for mentioned that the as subsiding being is expand to given in am business.

virtually. conference I more to hand I that of be we'll annual before over this forward upcoming our Analyst talking Day deeply and about all a on reminder the seeing you our there, inaugural look Lastly, XX. Cynthia, at to all Momentum March call

Cynthia. to over now, For

Cynthia Gaylor

offerings. focus challenges operations driven new to Dan, everyone. businesses demand year, a helped an our on for growth eSignature DocuSign customers our the at by workflow needs. Thanks, many scale capped and for and their customer continued We and strong year strong and accelerated results customers' fourth core primarily afternoon, for year, our The the meet and with new exceptional to execution to good heightened the growth adapt off for monumental transform fiscal digital changing and In and our DocuSign environment. quarter expansions, overcome robust

to the year-over-year million, XX% and subscription total to $XXX revenue XX% $XXX fourth year-over-year quarter, revenue increased grew For million.

and billion, $X.XX subscription of XX% hit year, $X.XX increase full XX%. billion, last total the an of revenue For over year, reached an increase revenue

Our quarter, revenue. year-over-year XX% international impressive in $XX revenue of the million ticking fourth increased up XX% to total an

over expansion million, For grew year, the international accelerated full reflecting XX% $XXX revenue across geographies. to

billings trailing $X.X last $XXX year-over-year For average. billion average, resulted over quarter's in with consistent million. the This as time, XX% XX% a quarterly in first reached QX we rose four-quarter to

additions worldwide, continued $X.X XX,XXX increase added year last than year, a of base nearly number give customers. public, full and customers had additions the past more went This years the after was of pace number increased an installed brings double to we QX billion. new added 'XX. nearly XXX,XXX we of over total For at a over our XX% customers this founded. To as magnitude time billings with robust new we customer sense of achievement, Company year we of compared XX the same the total you as fiscal this in the the at

added more the in added we a XX,XXX direct customers. for in of QX we XXX,XXX for doubling XX,XXX this, the nearly customers of we direct part new After year total fiscal As ended the 'XX, with number year. than over

the quarter for compared net XXX% we gross For our level a historic hitting fourth XX% retention our yet range, for Non-GAAP XX% ago. was in with row, the highest year a dollar QX. quarter gears. Switching at third exceeded margin

gross ago. Fourth year XX% full was with margin the a was margin XX% quarter subscription 'XX. consistent XX%, year, For fiscal compared with gross

margin operating gross subscription was non-GAAP year, million of significant improvement XX%, reached $XX our with record fourth X% saw million consistent full high We a or to leverage year. the the of operating compared 'XX. or quarter For margin XX% $XX fiscal in in last as

year, more with operating Non-GAAP margin $XX for the 'XX. a last improvement For million percentage-point in million fiscal the X.X than over QX XX%, full year. quarter compared net fourth was was income $XX

was $XX We year, million place X,XXX convertible $XXX capital strategic employees, existing $XXX notes. up of increase put a paid in XXXX quarter income year. the down the QX, structure. For notes We in net XX% million from to steps with senior last convertible issued fiscal the new ended over efficient in took 'XX. and majority and of XXXX more full our million In we an

capacity to new in $XXX us credit total. up to borrow put $XXX up revolving also million place additional We facility, a million in with allowing to

a flow in the XX% $XX This in $XX quarter in million fourth flow exited or our ago. $XXX X% we year. attractive our While greater and financial capital believe flexibility with from capacity, million for with $XX in was cash compared equivalents, the growth Operating million this investments. 'XX quarter along Free we or are restricted was prior cash the fund will million or operations margin year working margin. fiscal cash our the to additional to compares $XX XX% terms, in XX% cash We cash, provide generating with or agenda. sufficient quarter needs, same million cash

operating compared include $XXX of or the accounting compared in to million flow cash free million doubled convertible flow notes. For or a amounts or XX% million to to XX% XX% related cash $XXX And $XX grew 'XX. or extinguishment to the These X% XXXX more $XXX full fiscal $XX for the year, to than year million million ago.

margin, million Excluding would and this, margin. $XXX cash or cash or would have $XXX QX XX% flow been XX% flow have operating million been free

attractiveness million For operating are or business. would free XX% This been the full the of $XXX flow XX% model have the year, we across or $XXX underscores margin. cash our margin, would cash been million leverage have flow seeing the and and

secular the economy. year, our in we Coming into on of see continued fiscal this support tailwinds expect to guidance. Now, to anywhere

backdrop, confident a while untapped the are current extra the of be model of said, see layer in of With environment. closely. subscription-based and monitoring to know what certain being trajectory to and We our guide an level visibility, our complexity, adds to ahead. the our to pandemic which opportunity long-term approach That in the this impact guidance we can continues we gives us are

As we year, better forward operating rather fiscal we and to operating are guiding begin the individual non-GAAP align business. how are going with scaling new we to growing expense the than lines margin

'XX to $X.XXX we million growth or quarter anticipate to in fiscal of billion or to QX for year-over-year, in billion fiscal XX% and For revenue $XXX first XX% 'XX, growth the million this, total subscription billion $XXX $X.XXX $XXX of of 'XX of XX% year-over-year, year-over-year. year-over-year. revenue of of or to in we to growth QX fiscal XX% $X.XXX billion growth million and $X.XXX Of expect or XX% million XX% to XX% for $XXX to

$XXX and XX% billion $X.XX to billings, or fiscal to For XX% for $X.XX expect growth to 'XX million $XXX growth we QX XX% year-over-year. or of to in of XX% year-over-year, billion million

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

operating XX% for to fiscal X% to expect margin for and We be QX, XX% 'XX. XX% non-GAAP to

minimis We including and of expect de undrawn credit to fees revolver related to our a other see income, facility. amount interest

$XX $X we million. provision 'XX, expect million tax fiscal of For a to approximately

unprecedented to million, for QX million both average summary, We customers of our 'XX. the In we thank and for shares during to XXX tremendous their diluted outstanding weighted like this would and fiscal year. DocuSign shares partners XXX team, our expect -- fully efforts

year We are we excited deliver continue to the as this on ahead. large for opportunity

joining focus customers economy. as today. weeks we We forward long-term We we Analyst the on Thanks for us continue at anywhere up growth at help Momentum Q&A. a Operator? driving few for durable now, to seeing And Day. in at will the to thrive in look our scale open again will you call

Operator

Thank of first Morgan. you. Auty question [Operator Instructions] from Your line with the JP Sterling comes

Sterling Auty

Hi, Thanks. guys. Yes.

platform, of you're terms playing this that features on board curious of are to on what customers coming some SpringCM new versus are advanced eSignature? just Just seeing for what the capabilities ones the the taking

Dan Springer

be Is most that specifically for you're you? dimensions thinking useful What about vertical, would geography?

Sterling Auty

board. the No, across

the the and kind of of So, rate what's contract the kind on? what coming take So, new penetration? kind of management for additional in customers just cloud contract

Dan Springer

So, it's small relatively still a piece.

be a If about in happened fantastic you only think anywhere but signature the and throughout to ROI -- be people get not about with what's year, to is really we type quickly a all their business in year, talked just saw entry as get sort transformation and a not of high acceleration lot the incredibly applications for in to they COVID, with those need transformation way move able that effectively to an economy. dramatic of we digital

not cycle changed. to CLM, people has a were of year, definitely through is if work where professional the longer implement, to in of where there relative a things purchase think or like And at year. were statement So, sort those that this prior where services I require they you look slowed

pipeline Our is view, coming the we're out particularly year seeing of build, of the out though, that again. fiscal here, build QX coming XX,

so where reacceleration that a in that the over CLM not our and that the commercial enterprises, quite that customers. then bit largest be more to it's of a year quickly And for and smallest And it seeing customers, little little mid-market or a need full but in more solution ago with scale a sense tends going a to bit we more so, SMB than going those going sort much see we're is, in optimistic it's we're but fast-moving than largest having businesses CLM-like -- to little to we're or saw go be particular. our

So, see that we that's where developing.

Sterling Auty

Great. And follow-up. quick one then, just

the you timing are and the notary. in that first about see adoption? where the see remote when think the and might you'll use some market, of we talked the mentioned What's You that on cases

Dan Springer

Yes.

gone is release. coming piece moving out a companies, the going services the was case. to of beta, to we've we're now pleased financial We're and be focused on remember, month we we've which been sort through get that really limited And we're the what use notary. see this with, So, this first-party right a first

So, that's of -- which part the we think is the significantly total larger market.

party when effective own is First companies have their notary.

third which either consumers into they're people together notary. notarizing using people part, with to internal or them, with an that are of bring And So, their for smaller where that the by documents of sort is release. is the year we'll have and end a then, usually doesn't of two work actually notary party, coming a in-house out

Operator

comes the question line Stan next from Stanley. of Zlotsky with Morgan Your

Stan Zlotsky

how And from Perfect. the you a Thank methodology for you for perhaps mentioned guys. strong a And end congratulations guidance, then, the anything talk my approach on setting the in I at there about? metric fiscal looked different for the so Cynthia, and you that Maybe to investors initially you fiscal considered versus year. year, billings it what guidance 'XX? most you And to how on that quick mainly care about the some have because When will very of one 'XX. much, first setting the guidance takes follow-up. that are that's is the your you guys end. you approached puts

Cynthia Gaylor

can largely I since the guide Sure. philosophy we has guidance what mean, We to consistent public. super see. it's we data-driven. Yes. time our went been And

looking and within at to trends everything rates trends there. expansion demand looking the the added and kind that upsell new of and trends the kind pipeline from net we to year, So, at use during close we of

consistent perspective. guide see. and from very we that we it's it's And to what data-driven, So, been can quite

Stan Zlotsky

it. Got

could other as the how business just the far estimates baked as the same as the anything that's lens sounds as pandemic, those of far into or conservatism as lines? fiscal So, we're trend any along considering type you lapping like year 'XX, as those into applied

Cynthia Gaylor

Yes. Sure.

to I fiscal reasonable. grown Company has the it $X had Earlier bigger in we're than was in we on business given $X.X our ago. And going a at $X year XX% up I is billion and we crossed the is now, think billion. the guide -- right, just think quickly how mark, coming mean, billion our revenue scale, year, quickly today

you when solidly we're that bigger growing a think at so, just closely And off much at base. about looking we scale, are because growth

and we're that seeing. so, And watching that closely metrics different the we're

the certainly just think, of pandemic of seeing. customers the we've I demand we've and And demand additional the adds in given the of complexity, been an that's reflected all layer for year. acceleration guide had, number the

Stan Zlotsky

a What's out Dan. pace. outstanding show the What's it's The you. QX from seeing momentum. the the they what driving U.S.? really That's me. be And What very may mean, different continue accelerating I you're than it to there really a out Perfect. in And international off seeing I you follow-up quick if correctly, for numbers, growth I an recall then, think Thank slightly actually that bit adoption? are there? little international

Dan Springer

Yes. I I is, think, answer the it's very broad-based. mean,

experience, pretty that's we're that rare and And you in thing plan. that to matter, interesting the but the outside QX, the my in U.S., its single in that's very and of really just of special year, the was happened geography it's and something up exceeded get for say happen. to same things don't this U.S. for that QX, in One pretty every happened finishing us often,

sort Stan, it think EMEA law law here, And the of happening just view type either We're the Pac. seeing what's there's geography, quite And particular is don't my it's Asia interesting. actually so, board. of or versus or across common civil we a

looked ago, a shared about they're growth If U.S. where DocuSign and size sort of growth, think the of was laid we size actually result year this that and where in same it was quite over international close. its the you we when business at

U.S. here rate. a it was when higher what's think that happening I is much grew business, so, smaller, the And at

seeing we're happen international now, so, And business. our this in

in changing and that's So, nothing sort marketplace. surprising of really not it's the to us, it's

opportunity I really starting we're continue that to outside of like going growth just the we're the think we're be curve optimistic and through it's large we'd and it, realizing a to the way U.S., hitting see we're TAM year that ahead. to in very hit to

Operator

line the Walravens from comes JMP Securities. of question next Your Pat with

Pat Walravens

have XX% the the Dan, their that of I you. gotten you. I I think, Thank the bay we're or One shot. in, of if in mean, people each Great. two, across I can. first to I up live I think county from for you, haven't XX%

and So, on more in the if I'm is have here, of change return normalcy. wondering February any to you demand started as just March there environment, -- based a

Dan Springer

be suggests Pat. in I will know We business that a lagging a indicator, whether that seen we haven't don't leading would we seen or anything haven't change. anything. that But, our

have we Now, not is back this starting cases customers aren't new manual on back. are if COVID-XX process. centric, ago they're three the not about going to you that to with our paper, to quarters People that recall, going forecast this come that back said use that about DocuSign people new or going

real is -- sort that “normalcy”. people So, we your in question of will start us into to to to as with interesting the return of is, move some change I rate think, coming new question,

and not yes, demand to haven't have there's driven at environment. and maybe the seen isn't new yet. the this haven't change change that activity point, enough a But, enough, in seen any the we We change yet, change

Pat Walravens

up And as gone 'XX, sure quarters was at a quarters so driving not I'm it's retention Why April XXXX, a that? seven and seven of pandemic, you gone that's think right? looking the in All I row? is interesting What But, has dollar row. of model not super wants of XXX%, all net this. I mean, in up right. and it fiscal I'm which my it's Perfect. then, address to back QX in

Dan Springer

we the proud sort always And a customer more. answer have that, that to all about employees other. it's are just work because here. economics, been and to of it's customer we with of course, wonderful success But, years ago, I'll company, a they're the to It company. great think think could our stuff. it's finish want be I we about real success of the it. and And is because they although short makes start bat. proud let a and starting and and customer you our them looking customer year company proud success think, really investment three of to the good to the culturally, that. do I for says, think to money. makes in that, be made significant we articulated. We're as that forced make two, be SaaS we but CSMs We've going is say than We're I want Cynthia something be it off powerful, But at business, each of at we need just so great really before fantastic a a realized it's I part organization we But the a to not huge success about so part are we're bigger employees a

I that investment really And results. those is so, think now yielding

Cynthia Gaylor

small time. just then grow would have out if I Yes. and start to they you our customers that over remember add,

platform. said, year, the And product. so, particular, success and added help we've Dan as over on to start expand invested of the a customers past customer number that as lot use when in they in you out years we've of the And small, they couple think they become the successful them about this

also the number customers certainly use numerator as gets bigger that's denominator more. products getting bigger, the so, driving the that as And is

Operator

from question comes line Karl with next the of UBS. Keirstead Your

Karl Keirstead

Cynthia, up the different the high to billings and just there it timing anything if a double-digit maybe Dan the you. or the the Thank to I'm quarter, pretty beats DocuSign end. little was came you. pretty strong wondering against XQ Thank factors? in felt performance, just where relative prior fourth pin other had on quarters put close some

Cynthia Gaylor

Yes.

about So, on we this bit QX the little talked a call.

exceptionally renewals was of that QX timing in, on some deals came strong, So, early based in QX. and

QX QX so, XX%, as it a as strong growth. well wasn't the strong And albeit growth as at was

and quarter. unusual would more, nothing billings, the I in you there they deals. that So, of just the the of remind can was on just nature timing metric that given fluctuate

encourage quarter-to-quarter. right at line it four-quarter was in quarters that And with changes And that if last continue that take trailing average. to average in so, you out apply QX, it to we the look that and the really lens folks couple to of smooths

Karl Keirstead

Got it.

relative typically, give not Cynthia. when And fiscal you out, then, you your year, start adjusted Okay. follow-up guidance, for know, the operating helpful, maybe similar free fiscal guidance. 'XX, cash XX% as model that such little XX%. or we were bit that in Should, use cash operating margin flow it margins your look of 'XX fiscal free as in the a the XX, there to something unusual in to maybe correlation, fiscal different? you margins something will might cash I but That's pointed you. a flow be But,

Cynthia Gaylor

Yes.

the Even gave the to basis, all But, you similar in flow to and we're the the On for cash operating look when Now, flow. year, cash was took QX. convertible QX at we right? and in we the numbers compelling. adjusted in lot cash release, model, leverage to those of the margin, I kind that the notes guide we'll don't invest we think, So, continue right, showing a just without down an the quite in adjustment, of the growth. actually flow,

So, us flexibility. I really we we the that was give if My operating that the that's demonstrate in financing 'XX for invest leverage. we in reasons of out continue But, January wouldn't is, we'll can ordinary. of fiscal And to anticipate will. did one anything the to sense growth,

Operator

question of next Blair. with the William from line comes Bhavan Our Suri

Unidentified Analyst

actually Hey is on everyone. a This quarter. Jake for great on Bhavan. Congrats

in recent acquisitions similar in in what that about terms we've How love thinking capital the be And year. hear this landscape, follow-up, from competitive and the a touching seen to you're about of the space? about past? the as just strategy Dropbox can allocation Box in acquisitions just how So, on then, again thinking given would to we tuck-in the

Dan Springer

Yes, absolutely. to thinking I strategy. our don't think we M&A on see any dramatic change

love stuff I ourselves. build think, to we

just the to have, of majority year. the that fantastic be internally. from here. But We last wow, would team of time stuff product look the from advanced where time build a development are, to are all good not would product out intelligence vast, we And take expertise. and and Seal this It vast this that. some we they some that some just a case, of example see, analytics, on also, really time, built have we've product We we and but folks us a have domain long ahead in development, artificial in

revenue relatively Cloud we valuation. some that accelerating acquisitions are meaningful our we or we've in that think really to market So, that small strategy But, compared to seen nice have. tuck-in compared our Agreement

forward, a are the I we're we more of is that say just not same would probably got a last did at fundamentally we're the I highest you we It's that think, invested and didn't about do, as couple have could is example again, not investments. we closer think things we that it's did a CFO of we becoming few a anything also doing doing needed, It's her deals same But what I I to we might we the way. of with to go should way. now anything prior more. different banking a year, seat wonderful that we And in but expect Seal them. see that suppose looking on fantastic sort Cynthia of gives level, at differently. at CFO a company in we going more the do because us any or things deals, year could all perspective possible probably and in of thinking year experience to look last

and us Agreement increase ourselves the have acquisition the So, think, we future, as then and up we broadly in we're the of small more companies you that really highly successful in a number opportunities. I potentially were of felt acquisition And making we see for see investments integration may space, in do setting Cloud there. defined those

of aggressively, upgrade, the The second set we field see question don't growth say this us from about time, From paper. paper sort any to early or landscape, we want advanced there's we'll about feature we the all very of We think new into part in particularly that will we think is. fundamentally manual so of we a from been someone your is are building is of and competitive around in of TAM when processes, our think terms about competition, less where think of game bulk When always The market. majority vast, again, move expansion. coming time vast But provider. this to want signature, to smaller people the new change.

changing. that's and spaces. to continue a I always, Box course, our of We buys, of with want don't them. ours, that's looks careful is in partner we think when So, partner someone one of someone to take

open very our that won't this a have And change at relationship all. to model. approach We

Operator

line of with next comes Materne Kirk question Your the from Evercore ISI.

Kirk Materne

of of two next of time of from leverage being lot kind Meaning, an couple a obviously sales beyond the signed quarters. pandemic-related some with to could Dan, you next talk maybe where up? someone you coming really conversation the for of seem on a to a customers sort of had curious of nice the to of expansion huge three organization quarters. make, to that would decisions you you to sort they a these to because the products? just have What's the go renewal be after go all conversation departmental these of you this is start step meaning customers be deals new newer I'm conversation, the conversation next how that sort up about the that about year, functionality opportunity and came it over of might is really the enterprise-wide or over introduce that for able cohort sort like year

Dan Springer

Yes.

we more I of range. them. some absolutely at to of from signature. before There's cases just office in finance you the do more about quite course, a And they to us, utilization vast answer Cloud successful go the you, excited your mark that We And take renewals front us. opportunities, Agreement customers it. it's broader from before those the is a start use year. use to your as have small back with exceeding about really the make portfolio. purchase realize with then, That's conversation One of high that a there it sort people majority and customers department, vast, think, the it could depends, phenomenon. percentage is in said, the a course, the departments, you level, year of again, the exactly the It's going product I'd capacity thing have right? And to a customers they going in is with is capacity to to we opportunity use, then, of additional they the the signature. or question sometimes separate our say, the to start office. They even but have have to And some department. brought tell great of that's to with of how year we're with date that what's early starting HR stock kind they cases look same they're

we'll of they're been to year to I phenomenon bit in projects. all a they've level us put see people One, board, above. fast believe And of so, a going think, because a lot of breather of high two been on have now last adopting, a came have the back and they've successful also to so do this and remote this lot at little to I going we're kind year. coming take they're other a of sort of off going in need setting, that

digital started see it say the done transformation, difficult And pandemic made of a have they we it. done. are to of certain So, get people lot more CIOs of projects saying, backlog I'm need them now time, heard think really with I very this I glad at and I want because get same got that going a to things wow, got we're who for the they've to

to change. the And have accelerate so, for to they're had they that going to want pace expectations may even

you when of year, talked last those second considerable this be lot and opportunity. new it the have feeling together, So, year. to year, put opportunity cross those over customers, from leaves the should adds this when about But, Cynthia we're going And all great a renewals come that customer, fairly up, course mix complex. particularly of upsell significant cross-sell a that incremental earlier half year, it's us a of this

Kirk Materne

event? of could that What's process if in. one of on sort forward some this a Is hopefully maybe we're or bigger even a those year sort world? normalized where you your bigger Cloud, sneak practices bigger think to step make Agreement a now back thought you with a a of in you, counter the is second your build partner especially partners just really broader that of And having around sort I GSIs, on sort Thanks. ‘XX more can getting relationships quick the of

Dan Springer

Yes.

So, be candid as I'll I as can.

there. relationships We fiscal with easy get And year think strategy, believe with be large shared, but DocuSign it develop. a really economic get got doesn't sort so we economic said, love to fact starting able our of the wasn't So, really said, hitting enough an very broader back said, with we're with the they're the if be quite the the probably we right, this ground want those be the will the be year enough of this to at to we've there us Historically, for got regional with starting of but is is now, as year will time success that brand, use. there's and enthusiastic, you we as but you love totally of next running just And where much signature model. GSIs, significant and are too be this Agreement It year them they enthusiasm and of sort to that came to opportunity to at SIs scale model But, us. your can they products, someday we business all to the we to of looked their year, And weren't And traction SI I look, the would take the the if opportunity, we're Cloud, we for to GSIs. work really make about year disappointed lot it. particularly create also frankly, the building only. for bulk do because cognizant said GSIs because I partners. more we to aspire as software ‘XX, and DocuSign

Operator

next Piper comes with Your question Sandler. line Owens from of the Rob

Rob Owens

question I guess, to drill international front. little really ask [Technical And I I Mike down want a about. more Difficulty] ask on to a since a can't Sheridan, bit question the

competitors Difficulty] there, terms And U.S. the relative is to [Technical the sales there Difficulty] they lot are you opportunity what in where regard regional? Just in run go-to-market you look where into Just the that any as of terms -- maturity or at changes seeing? process? a out you're to relative geographies [Technical overall of of different and Are major the

Dan Springer

Mike. much couple own, additional our with our but anything at coming helped the sales want say teams, earlier, We've we as Well, in organization, international it's Yes. real beginning we coordinated our for to say, about voice services us if There the I weren't to because leadership really working we end, very working the I'm with I team teams, grown business, and continue I'll broken we so at marketing with happened to with growing use and to come result. eight in deeper. digital strategy, which, us we of success can of talk around own to try international sales focus construct, across of And professional part sort best additional And is course, going do last heard close of And But over And aggressively we think several our sitting two was Europe we in to lot And is part of put list get growth because nature. about start guess the that that the will standpoint be effort Rob, last quarters that wasn't support had well of like needed our another in and have -- sell coordination. I'd to channel have what's really as did markets. to markets. it some countries opportunity global that surprised has business could And our the me I realized investing mobile are could piece, course wanted opportunity. that we up as have better And have we us. our we we want just I in investment. and aggressively we it's of you into work to where we investment think XXX you because And think years just countries. focus would quickly. success significant before. talked at for to to coordination. well we've we was against. and more But, its of that in international I But, that can But, that Mike year, see pleased I the web that not let fundamentally most to a these of and put think should the channel deeper the in is call, to teams to the that and our continually the in of I'd the strategy of I those scale a say, go the I been our investments, growth international. over I be look our the a then because we types markets scale, there's reach we presence countries. Because business that continue be we've had From add XXX a bigger the eight focus forward growth leveraging a that's going business, say those can even we would as of think we're country right or this domestic

Operator

Your next Davidson. Jaluria question D.A. Rishi the from comes with of line

Rishi Jaluria

see so business Cynthia. got Thanks continuing. two questions. questions. much and Dan taking the I nice to my momentum for It's Hey,

up on the following conversation just international. First, on

or most? are areas? your you alongside on And other countries. you that, maybe hiring. Is Where You on up headcount coverage? Dan, side Is focused international ramping of talked it your the up really eight ramped leadership kind it product about sales

that at there's a amount seems a I on really, a had only that good it in slide in Asia, really in success to seems And surprising, like the look got international territories? opportunity me, success And big take any you've then, Japan get needs in is I of a laid at follow-up. least out you opportunity. region? As there's that it like traction, to country ex-Japan the, your to from the slide huge real you think, and those I deck, into What Asia, happen lessons But, Brazil, could you success had there.

Dan Springer

Sure. Yes.

in broadly successful to Asia product it if lot category, software core that are is historically building opportunity cover it have as like people leadership the by in I Pacific there's not and the of investment it's nature have field we two the what lot sales have But, And And I leverage traditionally Japan marketing, in economy reasons that we of and to we mean, the think those of we're Asia, the -- in have finance, at as market. we specifically bulk have have to field Asia growth. like looking core -- But look is strength things. of really how success. have legal we're businesses. in and built. and Japan. Pacific, works. those terms in increasingly customer more One, the that, organizations, of all your ANZ a the of we at for customer then to had sales good we thinking the Paris, going about In And of the we two we strength market think Japanese we're -- so be terms in we support what like core We're Europe distinct and Southeast question but other their starting businesses, then mindset. is of actually a teams support the now across and and A and success. bringing then JPAC companies Asia very the

and additional to in Melbourne, point, Asia. want launching can what for Sydney we're a plans what to pad for offices we important Singapore. other in Southeast Tokyo don't we that. got We to open do presence to this try to address which So, and do that's answer But in have think have small an probably leverage Singapore, the really we've in markets, at Asia. trying be We best

Rishi Jaluria

into there? some more And you All even to I as Thanks. getting would it. customer and yourselves you're the follow-up, more gain situations just land. characterize That's Got to more seeing side get competitive find SAP, how then, get Ariba, and pure-play traction right. what CLMs, against you as as helpful. continue Do or a the of more wanted or you like Icertis traction you on ask there, CLM

Dan Springer

that there's earlier think share just is is strong have money anything just situation it are other dramatic said but than competition us eSignature R&D spend the right? that those the in I companies you not competitive capability It's us, frankly, the is quite different And is product the there sheer in else, lead size by have revenue. -- on I advantage have. think than we that market, before. we and, for market talk paper. such about aren't it's that -- folks We We competition more lead this quite eSignature heard question in a in in about a Well,

companies a dynamic, other the in very are leaders it's but credible one the are CLM, standpoint, different and of that from there we in space. So,

So, we see a competitive do different dynamic.

today. that really as increasingly, a our it ensure I competitive on. think CLM on the investing a that And signature. industry-leading of be one You dynamic. your the integrations side leaders, we of dramatic our will But we're in not on mentioned general, they leader actually And we're the and are well the significantly more Ariba Interestingly, And in than to different side is SAP is partner Ariba. a SAP in into much as spot competitor. is point sell buy but are products

Operator

from Fargo of with line Michael Securities. question comes next Turrin Wells Your the

Michael Turrin

back should reference some could counter numbers laid in seed opportunities up, from there expansion Cloud those with the mindful you've also pick we momentum, you've sounds out, just that continues feel are here? year to you think like with of going should retention it level Going or something forward? how sustain number, penciling progression XXX-plus-percent Are links balance some those this we to the is the about out given laid starting to and the gain be Agreement and eSignature

Cynthia Gaylor

Yes.

opportunity where our So, on go. expansion market upsells that, are we number kind codes seeding the of in I and opportunity when think, the could that and just about think really new

given the watching rate we're the closely. However, and that been that scale growing, that quite we're we've number at

retention we've historic XXX% net of the XXX% above been our that quarters, for in the has So, of range bunch dollar been range. the last to range, kind in last

at And least of likely at been range is so, that I continue think to historical to we'll the metric closely. about And QX, the the they've think amount last then year. the way good, continue the that range. high monitor customers of high of about the that we over the added, we but that end would historical at end of new just for or quite net we've feeling But, also how posted and one, XXX% course we're expanding the the

Michael Turrin

That's helpful.

hiring. Cynthia follow-on Just maybe on a quick

a how of guide? sequential around At here? the there's growth on least like from you about looks midyear. from is already thinking the continued the laid headcount is But, helpful. adds margin seeds looks maybe that's initial with you to but just investment starting can in in step-up add you staying have it big in a expansion some case, the commentary expand had like anything perspective, moderate. It you're mode. think, capacity Can of You I pace

Cynthia Gaylor

sure. And about thinking it. exactly for we're Yes, that's how

through quarters, we hiring half higher are accelerated the in a then outstripped about demand last four so, you that us moved year, the capacity into grow last customer off to the to continue we as We really in investing our and And meet base year, the first demand year. if growth. for up think to coming set to right? of the And customer the field,

so, as R&D but in around And Agreement continue to also product make sales mentioned, the particularly we'll and investments and success, across to Dan innovate the in the continuing go-to-market had across portfolio, then Cloud.

investments. to we'll make continue so, those And

the nascent move how You position, opportunity market continue the our targets. aggressively how growth. towards we'll will us and to margin continue is invest But, operating given our for opportunity big to is, just see

Dan Springer

piece, the building other it second at a one in the And as wouldn't capacity reduction in I half. look

year. at factor middle sort that Technologies, you so Liveoak if on If did look the little we the employees we of the middle a that and inflated Seal the in number brought the of bit that you of in with in of acquisitions year, the the the

the way such So, you if we we business are invest very smooth out, an The expected. performance first. first. to you bottom Cynthia more growth that is not we're saying in but a that It's consistent we to back is no of is think threw I hear our that what line than the that from moving focus on problem, indication it's growth continuing

Michael Turrin

Yes, to it's on Congrats impressive have. you a closed. good problem the year just Thanks.

Dan Springer

Thank you.

Operator

Radke Your next the of question comes Tyler with from Citigroup. line

Tyler Radke

I of in, verticals are being this in you're some here maybe that maybe other about thinking terms of year? as ask much How thinking federal FYXX. driver success you particularly some you wanted in didn't around the to newer about those verticals you see or a just how

Dan Springer

Yes.

But, really think And think deliver and I and for that our the was for a federal strong certain what local, had I is state they have does in could their kind were we think for types substantial. sort aspects us sure. then, on geo I hypothesize incredibly but strong governments of of the it wasn't needed that 'XX, of about health like so business that very have that as year that of less was to our I strong human of it federal. the in many in and mean, at that But, we fiscal don't And populations services know So, government those right, of others. and we there verticals, which just in agencies way. And less vertical -- where in in to quick that I local. pandemic verticals, happen or urgency. a services overall state And business, quite types

that look lot about opportunity, from to it’s we think as a this federal, sort almost a think forward standpoint, think of we lot So, we of pent-up of and I year demand. and there's

their not the by pace there change Now, It's of is we rapid. federal sometimes run but fantastic, government.

to some be last state we those see the had building So, add take a good local success but think, we wouldn't pipe than if to we longer significant this opportunities things do surprised we of and that of in year.

Tyler Radke

normal not kind just if terms Thank about to with in back terms a Maybe full And just return follow-up. kind obviously, said. but to, Well in spending you. what Okay. just you're levels, of pre-COVID you assumptions of of could you're high-level what of modeling us there. thinking share in,

Dan Springer

customer Are or about you talking about our are talking you spending? spending,

Tyler Radke

entertainment, Yes, on spending, half back just you're office how either the curious that just through of about the spending travel, thinking of year. kind

Dan Springer

sort would to required DocuSign to not be return they until we've employees told October so, of indication Well, give of offices to Yes. that you our some Xth. that

pushed a had expenses the standpoint Cynthia, that back bit how you And our how might not the in Now, change investing. say, year talk our obviously. bottom out, fiscal our could and out at to perspective to push modeled we because previously on look that it and do wouldn't then. But, rate talked try I we've want in that it said to June before and income, at little improved again, increase continued the we be profitability from do that torrid significant perspective? that's in to any give operating 'XX we've some but about and line growth way focus want we

Cynthia Gaylor

course. course, of Yes, of

But, the second the to of customer to in line. year, the kind probably was own we're the And our office and impact more in wasn't It will on would it outperformance in say last really think starting because that ramp would there of bake of expense it's a half say so, slowly. moderated, I biggest kind year, demand. margin. right, our towards return I I the

other of so, travel places types kind went in away, when in And invested the employees of benefit we including of program. and employee some some

year, it a in included we're guide. the baking the the in kind of it's it's in a towards So, of but slow half but nutshell, second ramp-up,

Operator

would but Mr. to closing apologize, for are like Dan we And of I Springer the for questions. gentlemen, time to remarks. and Ladies we back turn call out

Dan Springer

Analyst us. so the all to inaugural and Thank really at Thank thank you you'll and of look I us forward as we'll for for you. Day, call, joining And there. much, beginning all you you able hope join our said the we seeing be to

Operator

today's concludes This conference.

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

DocuSign (DOCU) 12 Mar 212021 Q4 Earnings call transcript