DOCU - Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Fourth Quarter and Full Year Fiscal Year '22 Earnings Conference Call. [Operator Instructions] 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. [Operator Instructions] And I will now pass the call over to Roger Martin, Vice President of Finance. Please go ahead.

Roger Martin

to QX welcome Earnings and afternoon, the XXXX DocuSign Call. Good Finance. Martin, DocuSign's Roger VP I'm of

Joining call press on today website. our fourth me the results and CFO, Springer; CEO, quarter our Cynthia and is Dan posted Gaylor. Investor issued The was release on our today announcing earlier are Relations DocuSign's

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

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

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

information reconciliation over comparable our the financial our release, Dan? turn to most Dan the and I'd website quantitative these to regarding on of please be press investor.docusign.com. non-GAAP call at refer directly to For like found can earnings the information, Springer. figures, which GAAP measures today's

Daniel Springer

Roger. Thank Good everyone. you, afternoon,

you We Agreement lot the cover entire and as to we'll to a in have bring year. vision share more quarter wins with detail important performance some We'll today for Cloud for about our recent for talk to fiscal the sales the that innovations our continue and life.

that's about to areas And year-over-year XX% we'll range. the of XXX% an by QX, in and margin. for quarter. Finally, end International high sharing start focus $XXX revenue to year-over-year. grew like a a historical at the grew Billings revenue nearly operating customers non-GAAP I'd fiscal XX% we few the We XX,XXX new QX ahead see added in to total with look 'XX. to net million which our grew of XX% observations the strong quarter, increase year-over-year XX% continue year-over-year. quarter. our in XX% dollar retention is

billion for to that out growth course, X $X over X.XX billings challenges in businesses of total. customers recognize, more our dedication and team's contribute over new million billion. added reflect the and to size. COVID. of showcased macro XX% distinct $X.XX the and unwavering ending We revenue over grew XXX,XXX the for shifts of shape of These with XX% They we coming year, fiscal customers, year every the year by business our at workflows also the our tailwinds chapters results story. agreement in Looking 'XX digitization to needed that amid continued had than We

diminished the first elevated urgent need squarely that set the demand. our carried fiscal and sales of their 'XX. challenging a of were on focus year, We priorities. more purchases, dramatic their peak delayed the saw our there heart the macro half drove in were projects the investments of through of year of pandemic. impacting during buying urgency conditions meeting the focus patterns. During that of was to second pandemic, This customers' In acceleration half level and the Customers motion turned

cross-sell, As wane, begun urgent departmental a demand saw just generation shift we in mode expansion. sales to demand motion, we have our to back and of upsell

pandemic shift at excel anticipated, we than we ultimately, many customer the fast out generation of we organization. While patterns as enough in pre-COVID, move and for didn't the years coming was buying an demand quicker

is to demand Our now move reverting well demand from customer of to back high underway. generating capturing volumes

will moving believe progress in Cloud for we businesses we're as We in early year the continue work expect XX% market $XX very industry. fiscal Agreement XXXX through transformation At priority the over year. annual in revenue, first still every tangible through billion every high this billion the scale Digital we of remains a make opportunity. $X at

and position lead to that opportunity product is eSignature DocuSign Cloud. market the and Agreement strong uniquely our a with Given differentiation, leading capture broader and market brand, positioned

pandemic stay, not the toward to they the the eSignature to and people returning As paper. return movement is broader Agreement gain the subside continue to will office, clearly are only prominence. Cloud begin and to here to

falls on When succeed it about our our year ways down the We this on field we X confident go-to-market and we massive doubled presents, focus to we're customers org quarter, to methodology the buckets: our space are platform; the and have global think expanding driving our market into we market. main Last innovation opportunities. helping bringing grow. on began we're to opportunity

evolving. approach field use leaders commercial to recent North with been with and bolstering along cases, as strong across North scale As America leader And very our field is and with SMB GMs new the sales we've EMEA, in our and additions in customers their enterprise leadership APJ departments usage end, across also American well. a To LATAM, that close segments. we're new finalizing our

$X at of success field sales. billion supports and Importantly, we've global goal our organization to an beyond. begun our executive a the to and business search for This lead scaling

once our change, DocuSign. this and secured from onboarded of part leader, have we will new Loren transition As

the company Now from it's as in leader hard Loren to on North built efforts, encouraged customers really director and leader we driving and to in had on the of the has sales growth. here. noted Loren success a will this new CLM CRO. company upselling to big identity he's to key impact eSignature and and already verification, departments are remains as organization delivering years, use than a has level as seeing well more months. a from XX here think coming monitor cases, sales team us he He'll to cross-selling American of these our And our way executive expand his with our He having for next as sales leadership for staying the sales the and above, more as to the leading we're our scale. be the of year, our helping part products. be notary for we as cross-selling focused transition results add-ons from We're like

time employees they Cloud. in customer We're strict improving expense, new and adoption experience verify we're cash quarter, the our and just XX insurance the we story financial to Like efficiency the value chains out the New the opens million that Agreement verification Cloud and is manual systems, cases. gained to quarter, online CLM one statements. well. deepening example, use digital adopted transformation enabled who last DocuSign's which and use world's their of processes citizenship services remote key for for of and deliver part our the ongoing to expanded cases example, compliance. companies, strong. the across customers our all to verticals operational with described many with agents for us now hearing regulatory with and so nearly seeing DocuSign the different pharmacy largest departments more self-service From initial relationship Westpac XX replacing that Around of Cloud, painful products use notary Last loans realize in shared exceptional affidavit, same them eSignature experience Westpac recovery; their one our customer of U.S. and Australia's across and as their welcome opportunity For we AI-powered The quarter, and answer new annually. and by the were to DocuSign initiative. DocuSign Zealand, their start Agreement eSignature, time-consuming. claims as Agreement cases employee to the Group, maintaining and both customers By of implementing independent envelopes while savings across to as as was the an tremendous Last part prop largest agreement order, world, for door

API year the a this Zealand, New Gen of all and Westpac send For relationship. led integration, adoption plus of significant within the first CLM, our to

will eSignature Zoom. co-management allows next advisers complete financial our Agreement scenes. for encourage other automating agreements roots are processes the new which services signing we'll eliminating new customers few now to party easier DocuSign of more their DocuSign a as DocuSign Agreements to Joint of of eSignature advanced example of reimagine the the this opportunity review experience continued multiple customers Agreements is use we the a agreement that agreements innovation drive for our customer use. and or parties single company. in firms to Agreements every model. connecting stickiness new Joint that to they and deepen experiences Through enables number customers' weeks, between day thousands this with process big for organizations businesses them really called customers a More networks, capability second large engaging our the for for their a fiscal Cloud, our The the Joint by is can love. face-to-face This app things it and inspire of capabilities launch to agents. systems make behind to of the partnership, share, multiproduct year manual from tens often securely right paper, A with even involved. customer easier In every believe the great We work with adopt already Zoom makes virtual users network with as

address can temporal focus innovation. customer were a and we market driving they before and customers the new recalibrate team to winning a headwinds, total, Routing some to delays feature expansions require especially launch situations eSignature. ask, an Next delay an popular that regulations the during This This X-week planning of routing like envelope. add month, customer also for allows facing require for fiscal of on existing Despite we're agreements proud continuing continued process to post-COVID. fine-tuning dynamics has In both moving very to where we're increasingly called important adapt delay DocuSign be shifting timing are for a review we're agreement I'm results strong, 'XX and on an become to franchising rapidly how that a of the process as signed. users new the and Delayed

got that's As a of we've unchanged side, a indeed, our making take to success. ever massive and go-to-market will, few believe still the TAM. But clear positioned market to a leader, for scratching we're than vision opportunity momentum long-term quarters better a play we are surface strategy out. our long-term and changes on our we're future just The

Before to thank and the you I handing Cynthia detail, and to 'XX you're continue to the it more take Together, results fiscal want DocuSign walk in team QX customers. through moment our over to our outlook inspiring to us pioneering. year a

helping impact to Enterprise DocuSign others world. week, testament it's our named hardworking importantly, our to you. Companies. recognize Company's make over our are Cynthia, Fast team Innovative more top Most positive true this was that, see but It's With customers to one great on work, a the and XX Just us the of

Cynthia Gaylor

Thanks, everyone. finish solid a afternoon, year. to Dan, had and we Overall, good the

achieved flow half net-net, half anticipated, faster than unfolded first the we While our slowing the successfully fiscal and margins, and anticipated financial operating initially we operating differently scaled back expected cash the to business goals a stronger and and multibillion-dollar achieved for year. of We most growth than profitability. become with balancing 'XX than and record

Cloud turn digitize We the With XXX,XXX out continue agreement Agreement workflows, capabilities and that, multiple further of helped with and me their customers to build we XXXX results. and the journey. begin addition fiscal QX our to to portfolio digital new products let new

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

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

contributing domestic to XX% revenue. to continued fourth our $XXX revenue at international quarter, million total growth the Our year-over-year in XX% of outpace

of XX%. XX% X-quarter full and over of the $XXX year-over-year to revenue year, our to representing geographies. For expansion accelerated a grew average Fourth billings XX% international across quarter million, rose reflecting revenue total XX% million, rolling $XXX our leading to

billion. XX% For billings full to the increased year, $X.X

with new with XX,XXX and worldwide. year-over-year, nearly of customers XXX,XXX direct X.XX customers million year, bringing grew new addition in XX,XXX XX% added We total in the the the dollar net for than our over XX% total year With Non-GAAP the XX% end grew greater fourth our base Customers at XX,XXX customers XX% customers. fourth the XXX% historic compared retention a We increase the for margin high installed annual full the year-over-year for ago. quarter, fourth of with spend direct quarter, to was XX% our QX achieved to gross the a XXX quarter $XXX,XXX quarter an in year range. customers. for

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

year. million year compared XX% QX gross full non-GAAP XX% the reached operating operating ago. margin For last XX% was versus $XX XX% million year, last subscription a profit year. to $XXX margin with Non-GAAP compared was

year, profit for with to XX% 'XX. Non-GAAP fourth rose full XXX% in $XX fiscal margin million, million year. was operating compared was versus $XXX of For net income last $XXX the XX% the operating in non-GAAP million and QX quarter

For rate was increase XXX% of cash of in year a the $XXX in or million quarter the year-over-year. income XX% cash $XX the We cash, million, million XX% restricted for to million with year, increase million quarter flow from with XX% XX% fourth compares cash equivalents, and XX% $XXX or the margin. margin up ago. prior million net flow employees, grew a $XXX year-over-year in year. the investments. full a over Free X,XXX in or million 'XX, exited last the was Operating with an year fiscal quarter $XX We to $XX growth ended in This the same quarter cash compared or a XX% year-over-year. $XX year, XX%

year XX% operating $XXX year, year-over-year in And a flow margin million million flow free 'XX. to full XX% margin ago. cash $XXX million million at XX% compared XXX% or more margin grew than to XX% to to compared or $XXX the a For growing or cash $XXX XX% or fiscal doubled,

for of invest to sustainability our continue initiatives. we the through Additionally, health our planet

helped products of achieved and trees far, billion sheets carbon-neutral have paper year. status X save Our million we this so over and XX

continuing a later X.X-degree to are to as by reach We no future. our pledge science-based with of a efforts Celsius XXXX emissions trajectory committing aligned than ambition business setting net-zero for net-zero the part targets

to me Let turn now our guidance.

fiscal tailwinds to demand. the saw next Today, benefit initiatives early macro progress customer XXXX with a see year in we few we strong 'XX, a As fiscal to Dan lingering expect residual we over mentioned, we tapering go-to-market the while continue slower start from effects our see to we from heightened quarters. the ago, while demand

customers against new As traction gain success we to execute and strategy, and existing support win our we and expansion. continue customer

growth we related year. up as the see to expect the contribution We move picking through

to to growth expect turn 'XX revenue Of $XXX QX $X.XX fiscal million above a $X.XX billion or to in billion growth or XX% of that, $XXX We million we to subscription year-over-year year-over-year. current to and in of growth revenue let's factors have With or guidance. XX% and to XX% $X.XX 'XX $X.XX of worked diligently to or for growth the QX fiscal billion this, Total million for $XXX of a incorporate into million of year-over-year. outlook. XX% to our $XXX of XX% billion year-over-year XX%

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

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

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

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

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

diluted shares weighted 'XX. and expect outstanding to We QX million million fully of average XXX XXX fiscal both for

to share Additionally, to balance leverage underscores repurchase our shareholders. returns efficiently business sheet of a in our strong This to authorized Board our $XXX allows market fundamentals the deliver flexibly open million program our and program. confidence our us

to are sales the and we capacity as particularly enablement, will of for this and investing primary in scaling marketing, operations, still continue growing the long-term focus stages growth, opportunity. of market product early be in large our Our innovation and

our the to year's journey. Q&A, teams our tremendous better ramp enable We're demand-gen like turning last customers Agreement We we our our seeing remain during and Before and digitize With to at next their we're today. in our in lies open the that are and We on thank of for about encouraged And results help confident questions. X horizon. market agreement user call us unprecedented the and to joining are and the to focused would a customers partners processes few the for Operator? Momentum we thanks the team, up we In for motion, their that, DocuSign Cloud efforts the opportunity conference Agreement delivering our strategy for customer term, phase weeks the the now solid driving opportunity X. while April you the seeing broader fully $XX potential forward billion look capture near market. on on to of the shareholders. for will ahead and strengthen Cloud we

Operator

[Operator Instructions].

Tyler comes line Our from Citi. from question of first the Radke

Tyler Radke

kind first to and Maybe rebound? new initial of that QX how go-to-market this into building that how kind timing leadership for making. quarter. size are to could just compare moving Is start QX, they expectations the you forecast? relative you're of sales if you about are then your these around. Obviously, the about relative And help I wanted demand some you when your to a starts last thinking How of the us changes changes unpack event?

Daniel Springer

Yes.

substantial is XX% go-to-market leader we're of overall high bringing the new an success there I and to sales, company. our level, changes organization are XX%, at that in which for first, Tyler, So say would

is, that substantial. a say standpoint, headcount from would I very So

In sales virtually already addition, of sort a the if we've will, leadership of in change-out, complete made America. North you

if segments, think our enterprise. we have and the SMB, commercial we mentioned So the I about have you -- the

have SMB finalizing and and leaders commercial, scaled We Oracle leaders new those and are great Salesforce.com, from North new and leader. very companies like the in coming a enterprise are over to we America close

North that of the had the about headwinds year. biggest last we our where talked America challenges end at is So we from

is that so focused. And where absolutely we're

change the to timing, -- those exactly We ability in And team. not second quarter an sort of question impact. go-to-market the ago, your company had of I on since joined tell this level see the which I don't have X have to anything years then to we which close changes having you

you get think take to we If to is to a the as are can have to a at you we're possible, Cynthia look it's confident we has changes give get move And -- quickly guidance to. back -- will as as growth our impact to long-term that significant rates that sense aspiration as quickly try to that provided required us business. we the highly

Tyler Radke

question, to And motion. help for is your expectations? Just thinking of understand some relative eSig. go-to-market more? Great. performing second how And some CLM a deals you're seeing the to and upsell core just to you the that Can relative changes help focus CLM that how about about talk CLM talked you about being elevate do these us

Daniel Springer

Absolutely. Yes.

our them and execution. really get but that us, success driving leads it's to focused sales focusing. what that fact, to realized are also we In the get to team, then you hugely detail. needed didn't Plus team the the But in just also but is is, we've our products. consumption, about think growth, which And about much their excited on we for what done, we that eSignature quarter, that focused field field eSignature core so not we get future as on we last said we again, adoption to go too And critical and

AEs So Agreement field to to the be them part onboarding them in sort will. DocuSign of more We throughout the bag, we challenge able entire Cloud. sell asking as and really you were last if wanted personnel things we were of put other the year, to

business. defocusing the I from quarry realized signature we what think it was folks

address our your on enough get a the sellers But Agreement a opportunity, focus the win have frees leadership is which out we It's traditional question, purpose also, there? to our hey, team. market competitive success. pulled than really eSignature. eSignature to up we overall is in position in competitive CLM on Plus dedicated And and the to do critical field Cloud different we've both So be focus what to training eSignature it is to

substantial So be change, again, growth. those areas made. that the we of are both significant us, changes drive We think we those focus are think and on help to should

Operator

Sterling line comes next with JPMorgan. of question Auty Our the from

Sterling Auty

pipeline Can it sales what the you characterize into looked versus the coming looked like of quarter? what the the at end like quarter

Daniel Springer

share. sort I we sort I we disclose don't frames. have ways in of pipe mean, pipe a different you standpoint X tell So time would that build in But of metric from X different a terms can we or of of

the right to So if half as quite and down now, on of generate bottom a get in QX we close are pipe you the sort quarter. that of focused of But goal. business, primary the our bit can we actually pipe a the commercial building SMB

of things quarter, I quarter what and were the now a we're ago. quarter a some we right pipeline some for would again, where significant But So increase ahead. achievement those this of is our in today think for goals than be our seeing were

Sterling Auty

give that one that's is Understood. sense Can follow-up. a the you expectation built And of you net kind retention the gave? then of dollar guidance what us into

Daniel Springer

metric. forward. if to that don't any net guide I would We add And Cynthia, Yes. to color have don't going you you know retention

Cynthia Gaylor

Yes.

I high historic landed was would of end at we QX, at XXX%, range. think the our the So which

historic range. there. have that tried For metric QX, color as we be to, been seeing give a we're That it's you within the between to what But and we know, traditionally we've would XXX% Sterling, to guided expect about not, our has range XXX%. though

Operator

Jaluria Our of the Rishi with next from question line RBC. comes

Rishi Jaluria

back you're of us that dynamics seasonality, you obvious guiding on think giving in to next down a the 'XX stock it aftermarket pulled FY maybe in for look, happened acceleration I in be more the why First, little of -- year? COVID that it billings just a And the the half you're calls change? of confidence billings if to what I've of to that mean, of how the depending guess of that a your little we before to forward I where What's these a QX. wanted demand. an bit Can bit Is I And that how Look, was is based on amount than the level imply back given you in pipeline, even about to I maybe good alongside just guess, and outside follow-up. comps? through year. there? seeing quickly acceleration half relative provide walk a easy this give perhaps confidence even things the of that, to in guide all guidance on something able acceleration, sort does start got for then

Cynthia Gaylor

Sure.

will well. good as I'm start, then I'll thoughts some have think Dan sure I and So

think macro So fiscal I back out particularly the the to QX, QX last from level early in of to prior, just 'XX, into cases think with of strong the residual of benefit, the some you a year year, customer we dynamic. QX, demand. onetime big that, and QX use then fell played that tailwinds which year coming early set and right, accelerated renewals included on if consumption call to last around continue things expansion, talked about like And dynamics on we

in headwinds that we of think year. us last you opposite macro as terms this have kind the of helped about year, if So QX that some in tailwinds

at that So you say, QX a last exceptional, pretty extraordinary the I'd guide, when quarter. to you and QX remember have look it was was

expect this really last levels off the initiatives back we've these quarters of those hold. build few time tapering and go-to-market next of we so some And over since been year, as take to

QX you I'd particularly kind look as we So thought, the that at numbers. of with leave

Daniel Springer

thing at as And the while add year, you be that like beginning also the our little really performed Tyler to year, we'd the to that to have. asked of revamping, it's to as to bit is yet this the back a time. we're across It organization. the like said, year. you if earlier, we've of performance level that only implies, look a going take go-to-market I'd perform going At the clear, not execution this would increasing, of And way just of about be is that, at not end we take to to we're the

new So have quite rates leadership the a quarter. customer in numbers large this chance you adds the last and we to good as get optimistic that as new market at that we're with gets saw the incredible base really XX,XXX embedded increasing just opportunity this

land of lot a got we've motion. expand opportunity So our for and

So we are and our performance then improved drive to year. confident that the teams rise will throughout that that occasion

Rishi Jaluria

I look international. Okay. Great. at wanted That's helpful. And then to

U.S. underpenetrated QX. from lot I mean the should we've because, magnitude to from And dramatic QX demand maybe about going like So same it seeing extent XX a be going that be shouldn't especially a as should pretty international we how walk of be decelerated before, generation suffering to feels as the QX look, QX. lack forward. by to and, more from Maybe of international us points talked the what's result, through decel international, we're a yet, about thinking as on in

you can what's us maybe So well? as walk on through going internationally

Cynthia Gaylor

start I'll Yes, that with one.

So on growth So and XX% international, year, performance international, it with we in quite for from the were pleased and came a was our year-over-year. revenue rate QX of the right? XX%

we've there. we of were strength in investments EMEA and some around We particular made APJ again, with a initiatives quite the and the So saw performance. pleased

that say would would to expect I continue. we So

As international. is the growth when biggest it's lot business really we a year, into ways, opportunity we our some making look of look we're across international investments. in And the

Operator

line the comes Blair. of question next William from Roberge Our Jake with

Jacob Roberge

to wanted touch Just base.

ancillary of your of what verification of start be expectations over to more You the and how like markets expect could when remote really on and for portion kind online your products this I mentioned just next at year the material your are call. notary was some of base. just revenue and these tracking that's curious a ID those we years the few

Daniel Springer

Yes.

point, there. starting the really we wasn't success something significant particularly I'd obviously, one, thoughts, notary, QX had, say, until sales what two that So which like

numbers. in So a very, number in were standpoint, to from substantial. a of be quite small now QX where sort added Xx But quite very we really terms we've going of growth sales thought were reasonable And customers. growth. that we We of

part now adopt which making really challenge business. overall of that that that that is success the we their about, to sure moves integrate folks notary organization into talked the Our and

the product excited So identity, your into eSign as you that And will, it's around to there a will eventually being that. that, look questions continue category we high Plus about enthusiasm contributor think we single our asked when grow have. And you we're I biggest about. meaningful quite at of, if is sort

that's us as again, up early we're, real but been spot bright we So QX. finished low numbers, a for

Jacob Roberge

then overbought just become just more rationalizing of given agreements? this competitive that those And in -- is space if was follow-up, this or or services, seeing Or so Is everything call in are this just estate there curious out a you a matter year? really anything really this year? If real to really the customers just from and mortgage refinancings as and down just customers a just competition function financial a a perspective. of Awesome. are eSignature churn and are

Daniel Springer

Yes.

again, quarter our see there We there. we of competitive sort things. pricing two have and we substantially any see if There's meaningful team pricing competition anything -- don't I, intensity. to call, turn So with nothing this or in is differently. review that a this before see change different Cynthia and is

dramatic customers, about significant talk I think continue differentiation. have with product I when about and market field with the to addition, in quite conversations see as we people DocuSign a capabilities In positively leader the

don't So changing. that see we

meaningful. not much services, were absolutely, that that of or so the would I hypothesis, you piece, and your saw care, sciences not "Hey, product talking the And financial financial the other ago X your aggressive will, the real life -- about insight with DocuSign. we not therefore, most we most DocuSign. also here, around COVID America demand have where standpoint lot a are they we're industries expanded and love most on phenomenon year X real had is so industry, estate saying, product. if or probably primarily a -- macro actual think your of the estate, a over mortgage working biggest But North health quarters the other services, that aggressively and change. someone to with they you from the but those tell we now shelf, along in interested government space was the aggressively We're than I but

going so would lower that that's of So And grow of consumed." sort we're we how get that. all characterize to rates until at I

Cynthia Gaylor

is Dan would the Yes. on other spot-on, the only just -- verticals. that And is but thing I add

Just don't any concentration. as we a vertical reminder, have

touch bit So we we verticals little try the to is and always of about things in around and great But we're of then customers, texture give customers biggest would all a countries. the DocuSign I XXX one say the verticals. smallest

So it's a quite diversified base. customer

Operator

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

Stan Zlotsky

just Two high on quick questions level.

that that's U.S. in are as be happening the to guys there you the far needs international? in versus made being anything organization, changes different changes the that As to sales made what making is in are the

Daniel Springer

Yes. Dramatically different.

talked enough Stan. sales been our comments, success we on bit, the felt clear a may We solidify not in to prepared both the made and little markets. international leadership As it in have we moves our about core had really

in EMEA, to sort APJ, integrate excited. leadership is more closely our the the not trying sales there We're having the of there. biggest market, team which changes LATAM to performance in We're the in international by work success together. to we're So and making

we're that better to those to that drive doing want up right the further then about, in success, North opportunity. core naturally but bringing which expansion of already get into adoption that than refine even doing quite it's push we're we sign and they're really We sort In of talk motion leads even we U.S., ensure think that land the the a markets the customer, to want I really America, different. that in that.

revenue out for the an in our fact business there that American DocuSign I we're have so, company. to will more that those anyone and people and related other by of core the pushing markets. American not experience, additional of a of scale leadership therefore, the and necessarily see It's which leadership. But international we actually in sales a As roles SMB, that's level, significantly our have DocuSign. is than the incredible work And way, of North said, any commercial is scale many in replacing XX% still North enterprise new done had bring we're opportunity the the to higher

So that's making where the the that to we're changes sales are leadership occurring.

Stan Zlotsky

net quick customer feels guide. revenue growth, XXX% what Got billings to With implying it. there's range, a the retention stays typical just it essentially was in acquisition. billings XXX% XX% roughly calling like new follow-up, fiscal if limited just then 'XX implied guide almost on And

new us just are of it very be maybe of continues you logo because, pace to through strong. So about thinking into fiscal acquisitions how 'XX kind walk obviously,

implied So in that what's guidance there?

Cynthia Gaylor

the question. Thanks for Yes.

always give in we're we're best So view what our in as of we the sitting the seeing of know, where kind year, you quarter.

in the give And terms we're of very how so consistent guide. we

the the about net expand land remember, a we very when in we're QX. the added new have and year pleased and with we think net course adds I you think model. during that adds, of the And

And so the small they we of focused and landing to period when tend in each very new customers metrics out land or looking they the dollars expand you're start largest time. but doesn't some expansions expand, like at necessarily But revenue. of the because very are net over on become small, new contribute the tomorrow, the increments billings

billings. expand as But so land revenue into and And it's guide. is whether it built well model a is think as or that we about the

Operator

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

Karl Keirstead

wage a direct a I actually big I little people bit think thought a this than one down perhaps XX% that T&E cost of X some uptick offsets talk need only pressures but at sources of to invest, what you it's an those are costs, you your the number? 'XX for lower I'll landing might fiscal little to the Cynthia. thinking. in was higher Maybe Cynthia, inflation, bit And be given Can a peak. was got to got lot from margin operating it DocuSign's through your guide points of

Cynthia Gaylor

Yes.

success is to revenue XX% since both the And saw a when the sales time in short was, of And but period And growth. we're also this in QX margin innovation. the XX%-ish, go-to-market to initiatives our So then that we've doubled XX% the for been last in capacity, guess, about, that business and of been during kind the right, product investing year investing very come lot, and We've also peak, last of kind investing so year. a down. years-ish. scale that remember, marketing upside the coming we've course very talking about also off of we've kind we're that growth the X top of the to across of line, guide quite I the focused doubled at. expect talking we we're operations bit last would really we a of on the We're support the and

right So we think we of level have investment. the

through invest the margin, year, now, invest for think and to will. growth. investment As we we're XX% a move the see for back to right But we to business into and more we level reasonable at and if invest growth productively, looking opportunity that's we XX% invest

Karl Keirstead

average a as comp does retain and follow-up, cash order change employees? Cynthia, in at And attract any assume to in DocuSign structure that

Cynthia Gaylor

us -- it's market both -- who of very employees join have folks for along talent way. We're a the competitive the for may and we the evaluating kind always

So we're on or cash always we looking evaluating market-competitive, how be at equity. it's look whether comp the to that and

And so yes to both of those.

Operator

of comes Sills with America. from Brad Our next of Bank line the question

Bradley Sills

new pivot this as changes that bigger of last a motion successful might given perhaps was the demand I seems change. all the a It and hadn't been far quarter, on that expected the just talking you about expand you're perhaps it's I with that that gauge like to towards now? kind you in think, been wasn't such kind it the be efforts that It a guess Dan, in. towards seems on you've been would it trained going leadership company spoke to that had past, of a of the back Is coming is then. it when were embarking that now that more with though -- like retool so we assessment? hires fair big that undertaking sounded the new orders motion, for have how expand

Daniel Springer

I question. good a it It's I'd -- think pieces. ask X Yes. in about different

well Plus sort customers, like CLM. that get our we I we cases, the signature of integrating eSign in sell internally people about what and do Agreement to expansion Cloud. the our way, of as and DocuSign think with DocuSign is the it's if lead eSignature. start other products the And existing which the enable with most field And that to way core as you're talking call had products land we've challenge

that changes felt we just think not good, asking doing feels, to think, our to We ago, and talked I out. try led was America in in made sales new rolling scaled already you're and and I'd which leadership, feel to like consistency and about started as we'll scaled right that think that had spot-on. a GKO make did methodology making have is doing and that we investment approach about what us few able overall and that gaps there we experience some effort, out we the our what weeks get incremental bring we've that North the to right and to what I in we significant is success examining be off that the roll we're decision a go-to-market, we're and realized to we're right truly leader. and the in we the say were our we overall that

announced and So what thought also to wanted going enhancements make we make to say, or running, realized I to we today. that's in that that more I leadership go-to-market think we we track. less are we the kind on the the of changes would team, were And

we or changes but significant we making more So know when we made the I did that would diving we're to leadership. think not it think we're, on that were a less back in same those months again, make few track, in necessarily sense

Bradley Sills

Understood, Dan. One if may, please. I more,

was that say quarter, patterns expectations. same consumption on you the there? demand mentioned Would that's consumption you in last Any line your think and kind this quarter? comment of with I

Daniel Springer

eSignature Make platform? you meaning of we the for clarify you're saying When things. Are talking about question. usage use sure I the is different word consumption, a

Bradley Sills

volumes. envelope volumes, and usage Yes,

Daniel Springer

Yes. Yes.

onetime utilized. of it related, not but is One that growing, X we for so significantly that use during years cases things cases, COVID like gets saw the also the And new there's was before. demand We lot amount that we it. sold including ways and PPE if think that same the off, was about to reasons. what think use I amount people loans. So frankly, way had and the was growing consumption had were consumptions of many different One heightened when you we on had sort will, a not X growing quite pressure gets it hadn't sell,

those consumption, are our for things heightened And any see don't dramatic look cases in I But the at adjust you consumption. if meaningful. like so demand, and use onetime change if now you those

you lose for some use use you onetime case. millions, if cases, someone use as a and to growth So there's says, onetime for go upsell X Cynthia the going only those putting the a signatures mind, first some our direction, It they said, really, million about impact chance year, I'm financials the of rate, of so keep in in cases have QX, away. And when meaningful half was wrong them. do no this not you on those think but

So that down of the the on for and it upselling consumption base. from growth overall weighs

Operator

next Wolfe comes Alex Our Research. from question line the of Zukin with

Allan Verkhovski

sequential on touch I haven't This is seen to before. you for Allan guidance. Verkhovski revenues I guide guys the wanted on flat for revenue Alex.

as prudence can the So EMEA? any can Is there? and relates you how takes from within your there to especially incremental just puts see guide, you to unpack it contribution

Cynthia Gaylor

Thanks Sure. question. for the

think you onetime visibility the headwinds to One the We're it's renewing There's revenue or off the my from some environment. of use guide. on lower drivers guiding levels. revenue I current the X is probably the rolling when at behind similar So have look guide, to comments earlier. we at cases given key

the just timing is and of out rolling the the quarter. into second quarter deals of The deals rolling

on on that that, the would unusual I some basis. was comments But last comparative kind relative specifically. revenue a that's QX and I'd So kind I of year made on just just quarter of reiterate to of of the a also say basis

Allan Verkhovski

EMEA incremental in contribution the for Got you're full about And nothing terms how thinking it. else of year?

Cynthia Gaylor

EMEA, like perspective? geo from a

Allan Verkhovski

everything going the and on given in just world. there Yes,

Cynthia Gaylor

Oh, I the... see, just

Daniel Springer

Macro.

Cynthia Gaylor

Yes, from a perspective. macro

large big would we impact closely. something I humanitarian we currently is we haven't just and is seen it's our yes, there so business. we're for I are So our EMEA what looking something haven't But seen initiatives But tragedy, there where And a us, through but sit. we are It's a at seen a with would less supporting business haven't watching broader but perspective, we impact. there global that impact crisis impact horrible it from a so we to we closely, say say is kind business. efforts much, do of our if at to think any,

Operator

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

Peter Burkly

eSignature. of This past is actually some investing And the a if Kirk. motion part between to $X investments in of large the guess, investments, you're eSignature in how -- that's ancillary to just little these of revenue, about investing aspects. the products, -- strength seeing in lot a there's in I'm a cross-sell continued a Peter you're any the talked Burkly that slowdown thinking change from the getting given become demand going bit in Curious balance the whether generation differently for I versus piece. in that. the on curious for about guess billion any the guys you're you have I just first, making incremental remedy

Daniel Springer

any there's think on meaningful those of change dimensions. don't I Yes. either

it eSignature. As we early is the in we about think before, talked very

XX% right, in we eSignature is said, much XX% past about billion not of strong less that we sure I'm were we there. space, than on talked that our market that the And that. $XX penetration given have alone, And this share as TAM. Just definitely whole industry I the

primary I that So having there's bullish anything growth us. aggressive don't be us that on we'd less suggests the think or for to be opportunity

eSignature what that's if being about we excited like that Plus. other Those add we We are bullishness talked change on would are a notary call an primary my eSignature, capability. particularly Agreement Cloud identity it the happened about nothing opportunity the you functionality opportunity broadly, those there's very but capability, like

core in, when add business. those think I we're the on yes, focused squarely you

Peter Burkly

up That's guess, could I Awesome. with helpful, more. one if follow just And Dan. I

impressive I by growth again. customer of I'm grew at, one plus-XX% the actually metrics more metric think that looking the large is

So expand I Are there. terms to the usage? it large more a their guess, is just strength to -- of still curious solutions? specifically, it's thinking Cloud about function what's the larger still if driving of strategically those customers eSignature Agreement anything Or highlight there's continuing customers these broader just in for

Daniel Springer

company, a company like if only we it thought And actually. excited then for us. CLM-plus growth more each, a of talked user that did cases a about CLM. not got pharmacy think mindset. large opportunity about create and couple was about of And you CLM about signature significant signature examples once some they So there, a around the of use a it, in not they significantly that signature us And unlocked but a

we a get we well talked part that upsell also, and is us job done against but have small again that the signature aside enough customers think doing to X is again, it's allocation, up of to answer definitely driver is only of cases, by increase points opportunity. motion executed Because fantastic significant that our to haven't scale which things: land of I us. So some the one, moving far, vast and large majority customer macro around number do use to that said, own And an we From the have success of the get about, opportunity; the I've the tremendous a have still, both. that motion we the for in traditionally from customers and biggest this of still as need going. then we pieces

there us. So just We that's for to execute. have

Operator

comes final Scott line Needham. from of Our the with question Berg

Scott Berg

it the we're X to drill in that the new Cynthia, a with CRO sales change since down bit against join. I'll more the eventually little just leave on ask with or clock. wanted will and leader actually Dan, I Dan field up

make of we really time changes in. do should lot But pretty the of can to you what to? dynamic? changes confident we regards how think on before how the changes, kind feel the to if I this new organization guess that expected one of that of And at to wants think and in with frame comes a leader making levels you that You're leader about scenario? when the start sales kind making. of about kind you comes additional you're producing Because about hand, the

Daniel Springer

building background way. to have organization, things. we so you the quarter changes changes changes talked the we've made can't were We sure. way the your changing really last about leadership. we for are what These aren't dramatically more any to hands much and scaled already DocuSign out But I do make something need say, the kind about of level in it's would go-to-market might of tied, to we that and and on mean, right, Well, Obviously, how we're difficult of lot a that in Obviously, it's double about, want think think reaction. and do a that to person speculate, has a that good a to what their experience we going kind question. person are then not scale bring about saying, we around

have fantastic of level people didn't lots enough this seen at We people who scale. DocuSign. have of We had

that am comes and that she I "This so or confident new leader say, role, this And will the look fantastic. is he into

up across and scaled across with guys North a set set already me You leaders international America of have the fantastic geographies.

like their we're or if that have of or but higher of that way sense North other that folks that. my folks stride again, already with with course, fantastic than her But that perspectives in DocuSign nothing different it's that got goodness changes I But or hit to made. had and thought on You've them growth belief a handing, constructive person driving right they hand. have at him the course, structured we, engage America." made change, feel the in we've much is a So you're we are

Operator

back the now question-and-answer turn Dan over any the remarks. I'll concludes closing to call This session. Springer for

Daniel Springer

We that. I things. revenue, be do out right? milestone hitting I'll billion had we the points quick the that so about but been We've aside, growth have year of solid that really opportunity to growth, XX% about to to the to just lot couple talking quick. $X $X excited, another feel first, we're a fantastic billion think finish good at It a Guys, -- Yes, billion exiting glad we're annual year, want point of of here. to I And it we do rate. the hit $X

franchise that a leadership. strong, think building clear really are position market fantastic We going what to I is from durable out starts already be a of

ahead execute opportunity have and to massive We we will we a of us. and have And TAM now. now, execute

us. seeing Thank we're to much the very So coming forward looking months. for joining in you you all

Operator

conclude today's does conference. This

You time. may disconnect and a your great for lines participation, Thank your have at you this day.

DocuSign (DOCU) 11 Mar 222022 Q4 Earnings call transcript